Governments may differ in their readiness to use subsidies, but almost all agree that subsidies provided by trading partners are a bad thing if they artificially strengthen the competitiveness of the partner's industry.
Countries have been trying to control subsidy-driven competition affecting commerce within their borders for centuries. The U.S. Supreme Court, for example, has on numerous occasions invoked the Commerce Clause of the U.S. Constitution (Article I, Section 8) to strike down subsidies that favor local businesses over competitors from other states. The six countries that formed the European Coal and Steel Community - the precursor to the European Union - expressly abolished and prohibited all "subsidies or state assistance, or special charges" in the 1951 Treaty that created the ECSC. Exemptions from that rule later became routine, but that these countries even attempted such a mutual prohibition is significant.
To deal with subsidization beyond their borders, some countries also set up procedures for keeping out other countries' subsidized goods. This they did initially by either restricting imports or levying additional duties on top of the tariffs normally charged on all imports of the product. Nowadays these so-called "countervailing duties", or CVDs, are the only border measures allowed in response to subsidized imports, and are supposed to be set at a level equal to the estimated unit (i.e., per weight or volume) subsidy. CVDs are set unilaterally, however, and until the WTO Agreement on Subsidies and Countervailing Measures (ASCM) came into being, providing guidelines, there were few constraints on their use.
