Dumping

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

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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.

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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.

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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.

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As countries 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. Members to the World Trade Organization can file complaints against anti-dumping measures.

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Predatory pricing: Predatory pricing is the practice of a dominant firm selling a product at a loss in order to drive some or all competitors out of the market, or create a barrier to entry into the market for potential new competitors. The other firms must lower their prices in order to compete with the predatory pri...

International trade: International trade is the exchange of goods and services across international boundaries. In most countries, it represents a significant share of GDP. While international trade has been present throughout much of history (see Silk Road, Amber Road), its economic, social, and political importance ha...

United States: :For other uses, see US (disambiguation), USA (disambiguation), and United States (disambiguation)....