Dumping
In terms of anti-competitive behaviour Dumping has two definitions: - Classically, dumping is a subset of what is known as predatory pricing. Dumping in this sense is the act of selling a product at a loss now in order to drive competitors out of business, with the goal of raising prices when they do in order to recoup the investment. It is illegal in the same way that many other anticompetitive behaviours are. However, in practice, it is enforced far less than other antitrust actions.
- In international trade law however, dumping is defined as simply the act of a manufacturer in one country selling its product in another country below the domestic cost of production (in the latter country).
People inside a domestic industry who feel they are the victims of this second type of dumping intentionally try to blur the definition between the two kinds of dumping, in order to give the impression that the foreign country is doing something that would be illegal domestically. Often this is simply an attempt to justify protectionist measures like tariffs.
See also Import tariff Antidumping
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