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Dumping 101

The term “dumping,” in the context of international trade law, is when a manufacturer in one country exports a product to another country at less than fair value.

Dumping is bad because it could drive domestic producers out of business while also destabilizing the competitive structure of world industries.

In the United States, domestic firms can file an anti-dumping petition with the U.S. Department of Commerce and the U.S. International Trade Commission, which investigate the matter.

If the domestic industry is able to establish that foreign producers are dumping in the U.S. market and that the domestic industry is being injured by the dumping, then anti-dumping duties, or deposits, are imposed on goods imported from the dumpers’ country at a percentage rate calculated to counteract the dumping.

The U.S. annually reviews sales and if it shows no dumping by the company, the duties are refunded in full with interest. If the review determines that dumping did occur, then the company forfeits the duties.

The order can be lifted when a company successfully completes three consecutive reviews with no findings of dumping.

Before it was repealed in 2006, the Continued Dumping and Subsidy Offset Act, commonly known as the “Byrd Amendment,” instructed U.S. Customs to put all anti-dumping duties into special accounts for each case that could be paid out directly to the U.S. petitioners and interested parties.