The Byrd Amendment permits US firms that petition successfully for antidumping duties to collect tariff revenues. Whether these payments strengthen the duty’s ability to raise price depends crucially on market structure. In a competitive market where domestic and imported goods are imperfect substitutes, the payments are akin to a production subsidy and thus undermine the duty’s ability to raise price. Applying the theory to antidumping duties imposed by the United States on catfish imports from Vietnam, a three-equation model estimated using monthly data from January 1999 to August 2006 showed the duties to have had a modest yet positive effect on the US price. Although the weak price effect is consistent with supply enlargement induced by the payments, our econometric results suggest substitution effects coupled with incidence shifting are stronger causal factors.
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