Dumping

Statement

Dumping refers to a country exporting a good at a price lower than its marginal cost of production.

Notes

Dumping is a predatory pricing strategy: by selling below cost in a foreign market, an exporter aims to drive out rival producers in the importing country and eventually monopolise that market, after which prices are raised. It is one of the costs of trade and a standard justification advanced under the reasons for protectionism, where it is classed as an unfair trade practice.