Dumping (pricing policy)

This article is about the economics term. For industrial relations and social justice issue, see Social dumping. For the tax-avoidance term, see SUTA dumping.

Dumping, in economics, is a form of predatory pricing, especially in the context of international trade. It occurs when manufacturers export a product to another country at a price below the normal price with an injuring effect. The objective of dumping is to increase market share in a foreign market by driving out competition and thereby create a monopoly situation where the exporter will be able to unilaterally dictate price and quality of the product. Trade treaties might include mechanisms to alleviate problems related to dumping, such as countervailing duty penalties and anti-dumping statutes.[1]

  1. ^ Rosendorff, B. Peter; Milner, Helen V. (2001). "The Optimal Design of International Trade Institutions: Uncertainty and Escape". International Organization. 55 (4): 829–857. doi:10.1162/002081801317193619. ISSN 0020-8183. JSTOR 3078617. S2CID 153595157.