This article explores the structural complexities of
addressing input subsidies under the countervailing duty (CVD) system, with a
particular focus on practices and legal developments in the US. Traditionally,
input subsidies have been managed under the CVD system as ‘indirect’ subsidies.
However, recent trends in the US reveal a shift towards addressing these
subsidies within the anti-dumping (AD) framework; for example, by embracing
them as a particular market situation (PMS). This article identifies why input
subsidies in earlier production stages are not effectively addressed under the
CVD law by examining the structural limitations of the US CVD law and the World
Trade Organization (WTO) jurisprudence. Specifically, through a review of
upstream subsidy cases in the US from January 2011 to July 2024, the article
highlights the challenges and complexities involved in applying upstream
subsidy provisions. The article concludes by emphasizing the need for clearer
and more effective legal disciplines on input subsidies within the CVD
framework to ensure comprehensive regulation of such practices.