Even though certain government-provided programmes or benefits meet the technical definition of a subsidy under United States law as discussed above, this is not the end of the analysis. The WTO SCM Agreement establishes a 'traffic light' analytical framework for determining which subsidies may be countervailed and which may not. Under this system, not all subsidies are countervailable. Rather, only those fitting within the WTO framework as either 'prohibited' red light subsidies or 'actionable' yellow light subsidies may be countervailed under the terms of WTO.

Although the terminology differs, the basic WTO framework is reflected in United States countervailing duty law. As described below, the United States will always countervail both red light and yellow light subsidies because an affirmative Commission injury determination is required before either can be countervailed. Both WTO and the United States law previously exempted green light subsidies from countervailing duties, but that is no longer the case.

Source: Business Guide to Trade Remedies in the United States: Anti-dumping, countervailing and safeguards legislation practices and procedures