A ___ duty is a specific tariff imposed by an importing country to neutralize the negative impact of foreign government subsidies provided to the exporters of that product.
- Green
- Paris
- National Income
- countervailing
Answer: countervailing
When a foreign government heavily subsidizes its domestic steel industry, those companies can export steel at artificially low prices. To level the playing field and protect its own domestic steel manufacturers from this unfair, state-sponsored competition, the importing nation levies a countervailing duty exactly equal to the estimated value of the foreign subsidy.