About Non-market Economy Status:
- The United States of America designates a country as non-market economy based on several factors namely
- If the country’s currency is convertible;
- If wage rates are determined by free bargaining between labour and management;
- If joint ventures or other foreign investment are allowed; whether the means of production are owned by the state; and
- If the state controls the allocation of resources and price and output decisions. Other factors like human rights are also considered.
- The non-market economy label allows the US to impose “anti-dumping” duties on goods imported from designated countries.
What is market Economy?
- It is a system in which production decisions and the prices of goods and services are guided primarily by the interactions of consumers and businesses.
- That is, the law of supply and demand, not a central government’s policy, is allowed to determine what is available and at what price.
- A market economy gives entrepreneurs the freedom to pursue profits by creating new products, and the freedom to fail if they misread the market.
Key facts about anti-dumping duty
- It is a tariff imposed on imports manufactured in foreign countries that are priced below the fair market value of similar goods in the domestic market.
- The government imposes anti-dumping duty on foreign imports when it believes that the goods are being “dumped” – through low pricing – in the domestic market.
- Anti-dumping duty is imposed to protect local businesses and markets from unfair competition by foreign imports.
Q1: What is Inverted duty structure?
It is a situation where import duty on finished goods is low compared to the import duty on raw materials that are used in the production of such finished goods.
Source: Why Vietnam wants US to change its ‘non-market economy’ status
Last updated on June, 2025
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