§1677a Export Price and Constructed Export Price

Summary

Explains how to figure the price used in trade duty reviews for goods sold to the United States. Export price is the first sale price by the foreign producer or exporter before the goods arrive in the U.S. if the buyer is not related to the seller or if the sale is for export to the U.S. Constructed export price is the first sale price in the U.S. by or for the foreign producer or exporter, or by a related seller, when the buyer in the U.S. is not related. Both prices are changed to include or remove certain costs. They are increased for packing and similar costs not already in the price, for export-country import duties that were rebated or not collected because of the export, and for duties to offset export subsidies. They are reduced for costs and U.S. import duties needed to move the goods from the exporter’s shipment point to U.S. delivery, and for most export taxes or charges paid in the exporting country. Constructed export price is also lowered for U.S. selling costs (like commissions, credit or warranty costs, seller-paid buyer expenses, and other selling charges), for any extra work or assembly done after importation, and for the profit tied to those U.S. costs and post-import work. If a related U.S. importer adds much more value than the original goods, the agency may use prices of identical or similar goods sold to unrelated buyers as the basis, if enough sales exist; otherwise it may use any reasonable method. The profit to subtract is the actual total profit multiplied by the fraction of expenses that are U.S. expenses; “total expenses” and “total profit” are measured using the first applicable group of expense categories listed in the law.