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The dumping calculation
08/12/2022 07:17
When making a price-to-price comparison, the Commerce Department compares adjusted net export prices to adjusted net home market prices. Accordingly, the Commerce Department's first step in the calculation is to make various adjustments to the actual sales prices in both markets. As noted in a previous chapter, the goal of these adjustments is to ensure comparison:
- Of identical or similar merchandise;
- To customers at the same level of trade;
- At the same point in time (i.e. at the factory gate); and
- Under similar selling conditions.
The summary charts in table 5 detail all the adjustments that the Commerce Department typically makes to the invoice price to derive an adjusted ex-factory price.
Before calculating the weighted average, the Commerce Department must determine the net prices for home market or third country sales. The foreign company will have already submitted detailed computer files containing all of the necessary data in the format specified in the questionnaire. The Commerce Department starts with the gross unit price for each individual transaction. It then makes all of the appropriate adjustments shown in those charts to the gross unit price on a transaction-by-transaction basis.
Table 1. Calculating anti-dumping margins
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Price-to-price comparisons for constructed export price |
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United States price (CEP) Invoice price to unaffiliated United States customer
Selling expenses
Other costs/benefits + Duty drawback + Interest revenue from customers
= Ex-factory net United States price |
Home market price Invoice price to unaffiliated customer
Movement costs
Selling expenses
Other costs/benefits + Interest revenue from customers Dumping adjustments ± Variable cost differences due to physical characteristics ± Level of trade ± Commission offset
+ Packing costs for exportation to United States = Ex-factory net home market price |
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Amount of dumping = net home market price – net United States price Dumping margin = amount of dumping/net United States price |
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Price-to-price comparisons for export price |
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United States price (EP) Invoice price to unaffiliated customer Discounts and rebates Movement costs
Other costs/benefits + Duty drawback + Interest revenue from customers = Ex-factory net United States price |
Home market price Invoice price to unaffiliated customer Discounts and rebates Movement costs
Direct selling expenses
United States direct selling expenses + Commissions + Royalties + Warranty + Advertising + Technical service + Imputed credit Other costs/benefits + Interest revenue from customers Dumping adjustments + Variable cost differences due to differences in physical characteristics + Level of trade ± Commission offset
+ Packing costs for exportation to United States = Ex-factory net home market price |
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Amount of dumping = net home market price – net United States price Dumping margin = amount of dumping/net United States price |
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United States price to constructed value comparisons |
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United States price (EP) Invoice price to unaffiliated customer - Discounts and rebates Movement costs
Other costs and benefits + Duty drawback = Ex-factory net United States price |
Constructed value (CV) TCOM (total cost of manufacturing) + G&A (ratio*TCOM) + Interest expense (ratio*TCOM) + Profit (calculated based on home market sales data) + Indirect selling expenses (calculated based on home market sales data) = CV (By not including direct expenses, movement expenses, and packing in CV, the Commerce Department simulates these adjustments in a price-to-price comparison) United States direct selling expenses + Commissions + Royalties + Warranty + Advertising + Technical service + Imputed credit Other costs/benefits + Interest revenue from United States customers Dumping adjustments ± Commission offset + Packing costs for exportation to United States = Adjusted constructed value |
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Amount of dumping = adjusted constructed value – net United States price Dumping margin = amount of dumping/net United States price |
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Disagreements about the adjustments can involve two separate issues. First, the Commerce Department sometimes misprograms the computer and adds an adjustment when it should subtract, or vice versa. It is important to check carefully all of the Commerce Department calculations of dumping margins.
Second, there may be a disagreement about the method of calculating the amount of the adjustment. Usually the Commerce Department uses the adjustment as reported on the computer media, so the foreign company knows how the adjustment was calculated. In some cases, however, the Commerce Department revises the methodology used to calculate the adjustment. The company should make sure it understands the new methodology and checks the accuracy of the Commerce Department calculations.
