Using Chinese firm-level trade data combined with global anti-dumping (AD) and counter vailing duty (CVD) investigations, we uncover a previously overlooked cost of industrial policy under WTO agreements. At every stage of AD/CVD investigation, subsidies signif icantly raise the probability of affirmative tariff rulings and lead to higher imposed tariffs. Firms that received larger subsidies are also less likely to be granted firm-specific duties, which are lower than the product-level duties applied to all other firms exporting the inves tigated product. While AD/CVD duties create a moderate trade barrier that an average Chinese firm expects to face, they represent a significant cost of subsidy for those heavily subsidized and those potentially receiving firm-specific duties. The intended benefits of in dustrial subsidies are partially offset by increased foreign trade protection：AD/CVD duties induced by subsidies reduced the subsidy effect on firm revenue growth by 22%.