10/11/17 What is Dumping?
The laws of many countries provide a number of legal protections for domestic businesses against foreign imports. These provisions are designed to insulate the nation’s manufacturers from excessive foreign competition. These include antidumping laws, countervailing duty provisions, unfair import trade practice actions, and what is known as the “escape clause.”
Today we will discuss what dumping means.
Dumping is the name employed when foreign merchandise is sold in the domestic market at less than its fair value in the exporting country or less than its production costs. An importer might choose to dump goods in a country at such a low price to develop its market share. In the US, the Antidumping Act of 1921 proscribes dumping that causes material injury to domestic industry.
Proving dumping may be difficult because defining fair market value is difficult.
In our next e-Legal Lesson, we’ll analyze countervailing duties and the escape clause.