Science Fair Project Encyclopedia
Antidumping is a means to restrict international trade without tariffs. It is supposed to protect significantly endangered domestic industries in cases where foreign firms' prices are below the cost of production. Since countries can rule domestically 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 has significant impacts beyond the antidumping duty. Since domestic firms can file an antidumping suit and trials are costly and the decisions are difficult to foresee, there is a large potential of strategic actions and distorted market outcomes.
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