Dumping

In a non-economics context, dumping may refer to illegal disposal of trash.

In economics, "dumping" can refer to any kind of predatory pricing. However, the word is now generally used only in the context of international trade law, where dumping is defined as the act of a manufacturer in one country exporting a product to another country at an unfairly low price.

What level constitutes "unfair" may be objectively defined as a price lower than the price in the manufacturer's own country, or lower than the actual cost of production. In practice though, many governments accuse foreign producers of committing dumping simply because the domestic industry finds it difficult to compete with the imports, irrespective of whether the producer's actions are actually improper.

In the United States, domestic firms can file an antidumping suit under the regulations determined by the Department of Commerce and the International Trade Commission. These trials are costly and the decisions are difficult to foresee, so there is a large potential for strategic actions and distorted market outcomes.

Since countries can rule domestically on whether native industries are in danger, and whether foreign firms' prices are below the cost of production, and since the foreign cost of production cannot be easily known by domestic courts, the institutional process surrounding the investigation and determinations can be very unpredictable.

See also

fr:Dumping pl:Dumping zh:傾銷

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