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Definition of 'Dumping'

Dumping is the sale of a product in a foreign market at a price below its cost of production or below its price in the domestic market. It is a form of predatory pricing that can harm the local industry and lead to job losses.

Dumping can occur when a company has excess production capacity or when it is trying to gain market share in a new market. It can also occur when a government subsidizes its exports, making them artificially cheap.

Dumping is illegal under international trade law. The World Trade Organization (WTO) has rules that prohibit dumping and allow countries to impose anti-dumping duties on imports that are sold at below-cost prices.

Anti-dumping duties are designed to offset the unfair advantage that dumped imports have over domestic products. They are calculated to equal the difference between the dumped price and the normal price of the product.

Anti-dumping duties can be effective in deterring dumping and protecting domestic industries. However, they can also have negative consequences, such as increasing prices for consumers and harming trade relations between countries.

The WTO has a number of rules that govern the use of anti-dumping duties. These rules are designed to ensure that anti-dumping duties are used only in cases of genuine dumping and that they do not have a negative impact on trade.

The WTO also provides a forum for countries to resolve disputes over anti-dumping duties. If a country believes that another country is dumping products, it can file a complaint with the WTO. The WTO will then investigate the complaint and make a ruling.

Dumping is a complex issue with a number of potential consequences. It is important to understand the different factors that can lead to dumping and the implications of anti-dumping duties.

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