Meaning
Industry cost benchmarks allow a domestic industry to recover its full costs and earn a reasonable profit under competition. Trade authorities calculate a non-injurious price during anti-dumping investigations to determine the level of protection required by local manufacturers. This figure represents the price at which the industry would sell if no unfair imports were present.
It establishes the benchmark for setting the maximum allowable duty.
Fair Margin
Determination of this value involves a detailed audit of production costs, overheads, historical profit levels, and capital expenditures. If the landed cost of imports is lower than the non-injurious price, the regulatory body may impose a duty to bridge the gap. This ensures that the domestic producers can maintain their facilities and employment levels.
The calculation ignores temporary market distortions to focus on long-term sustainability.
Duty Ceiling
Implementation of trade remedies often relies on the lesser duty rule, where the actual levy is capped by the non-injurious price. If the dumping margin is fifty percent but the price gap is only thirty percent, the duty is set at the lower figure. This prevents overprotection and minimizes the cost impact on end users.
Distributors use these benchmarks to forecast the long-term viability of specific import channels.
Profit Restoration
Financial audits are required for validation. Auditors review financial records to establish the non-injurious price.
