What Is Safeguard Duty and Its Main Objectives

Safeguard duty is a type of trade remedy that a government can impose to protect domestic industries from a sudden surge in imports that cause or threaten to cause serious injury to the domestic industry. It is a temporary measure that is imposed in addition to regular tariffs, and is designed to "safeguard" domestic industries from the harmful effects of import competition.

The World Trade Organization (WTO) governs the use of safeguard measures, and its Agreement on Safeguards sets out the rules for their imposition. According to the Agreement, a safeguard measure must be applied to a product (or group of products) that is the subject of increased imports, and the measure must be applied to the imports from all sources and not just those from specific countries. The measure must also be phased out gradually as the domestic industry adjusts to the increased import competition.

Safeguard measures come in different forms, including tariffs, quotas, or a combination of both. They may be imposed for a fixed period of time or until the domestic industry has adjusted to the increased import competition.

It's a ways to protect the domestic industries from the import surge and threat of harm, Such measures are taken by the countries in order to protect their respective economy and domestic industries.

Main Objective of Safeguard Duty

The main objective of a safeguard duty is to protect domestic industries from a surge in imports that cause or threaten to cause injury to the domestic industry. Safeguard duties are intended to provide temporary relief to domestic industries that are being harmed by increased imports, so that they can adjust to the increased competition and become more competitive in the long term.

Safeguard measures are imposed under the rules of the World Trade Organization (WTO), and are intended to be used in a manner that is consistent with WTO rules. The imposition of a safeguard duty is intended to be a temporary measure, and the duty is typically imposed for a period of no more than four years. The duty is intended to give the domestic industry time to adjust to the increased competition and become more competitive, after which the duty is removed.

Safeguard duties are different from anti-dumping duties and countervailing duties. Anti-dumping duties are imposed when imported goods are sold at less than fair value, and countervailing duties are imposed when imported goods are subsidized by the government of the exporting country.

In general, the main objective of Safeguard duty is to provide temporary relief to the domestic industry to bring back equilibrium in the domestic market and to prevent injury to the domestic industry caused by an unexpected surge in imports.