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Countervailing Duties, Antidumping Tariffs, and the Byrd Amendment: A Welfare Analysis

Author

Listed:
  • Troy G. Schmitz
  • James L. Seale, Jr.

    (Arizona State University and University of Florida)

Abstract

This paper determines the effect that offset payments under the Continued Dumping and Subsidy Offset Act (CDSOA also known as the “Byrd Amendment”) have on tariff levels that are lobbied for by U.S. producer groups. We derive the optimum antidumping tariff that would maximize the welfare of producers receiving CDSOA offset payments. We compare and contrast this newly derived “optimal antidumping tariff” (that maximizes the sum of producer surplus and tariff revenue) with the optimal revenue tariff (that maximizes tariff revenue alone) and the optimal welfare tariff (that maximizes the sum of consumer surplus, producer surplus, and tariff revenue). We find that prior to the CDSOA, U.S. producers would always lobby for prohibitive tariffs that maximize producer surplus. However, under the CDSOA, producers will, in most cases, lobby for a tariff that is not prohibitive but is still higher than the optimal revenue or optimal welfare tariffs.

Suggested Citation

  • Troy G. Schmitz & James L. Seale, Jr., 2004. "Countervailing Duties, Antidumping Tariffs, and the Byrd Amendment: A Welfare Analysis," The International Journal of Applied Economics, Department of General Business, Southeastern Louisiana University, vol. 1(1), pages 65-80, September.
    • Handle: RePEc:ija:ancoec:v:1:y:2004:i:1:p:65-80
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    File URL: http://www2.selu.edu/orgs/ijae/Journal%201/IJAE%20Sept%202004%20A5%20schmitz%20and%20seale%2009%2024%2004%20RV4.pdf
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    Cited by:

    1. Collie, David R. & Vandenbussche, Hylke, 2006. "Tariffs and the Byrd amendment," European Journal of Political Economy, Elsevier, vol. 22(3), pages 750-758, September.
    2. Yoshitomo Ogawa & Yoshiyasu Ono, 2011. "The Byrd Amendment as Facilitating a Tacit International Business Collusion," Review of International Economics, Wiley Blackwell, vol. 19(5), pages 877-893, November.
    3. Troy G. Schmitz, 2018. "Impact of the 2014 Suspension Agreement on sugar between the United States and Mexico," Agricultural Economics, International Association of Agricultural Economists, vol. 49(1), pages 55-69, January.
    4. Benjamin Liebman & Kasaundra Tomlin, 2015. "World Trade Organization sanctions, implementation, and retaliation," Empirical Economics, Springer, vol. 48(2), pages 715-745, March.

    More about this item

    Keywords

    Tariffs; antidumping duties; countervailing duties; welfare; Byrd Amendment;
    All these keywords.

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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