Final answer:
The countervailing duty is designed to increase the price of imported goods to counteract the practice of dumping, ensuring imported goods reflect the cost of production and protect local industries.
Step-by-step explanation:
The purpose of the countervailing duty is to increase the price of the imported good. This type of duty is connected to anti-dumping laws, which are regulations that prevent imports sold below the cost of production from undermining local industries. To counteract this practice, tariffs are imposed that elevate the price of these imports to reflect their actual cost of production. For instance, if a country identifies that goods are being dumped onto their market, in violation of World Trade Organization (WTO) rules, they can file a complaint and potentially have these countervailing duties applied to protect their domestic industries.