Less Than Fair Value (LTFV) is the legal standard for "dumping" under U.S. trade law. Selling at LTFV — combined with material injury to a domestic industry — is the basis for imposing antidumping duties. The standard is set out in 19 U.S.C. § 1677b.
A sale is at LTFV when the export price (or constructed export price) to the United States is less than the "normal value" of the merchandise. Normal value is generally the price at which the product is sold in the home market or, if home-market sales are limited, in a third-country market or as a "constructed value" (cost plus reasonable profit).
The LTFV standard is administered by the Commerce Department, which calculates a dumping margin for each mandatory respondent in an antidumping investigation.
A finding of LTFV alone is not enough to impose antidumping duties — the USITC must also find that the LTFV imports cause or threaten material injury to a domestic industry. Both affirmative findings are required under the bifurcated U.S. system.
LTFV determinations involve highly technical calculations, including:
- Adjustments for differences in physical characteristics
- Adjustments for level of trade
- Adjustments for circumstance-of-sale (selling expenses, credit costs, packing)
- Cost test to disregard below-cost home-market sales
- Currency conversions
These adjustments are detailed in Commerce's Antidumping Manual and have generated decades of litigation at the Court of International Trade and the Court of Appeals for the Federal Circuit.