NCPA - National Center for Policy Analysis

Antidumping Laws Are Another Form Of Protectionism

December 6, 1999

While traditional trade barriers such as tariffs have fallen, they are being replaced by a new form of protection: antidumping laws. Historically, dumping is said to have occurred when a foreign producer sells goods in the U.S. market for less than it charges in its domestic market.

  • The first U.S. antidumping law was enacted in 1916 to protect U.S. firms from unfair foreign competition.
  • But there were fewer than 250 cases brought between 1934 and 1974, according to economist Gary Hufbauer.
  • The Trade Act of 1974, however, greatly expanded the scope of what constituted dumping, leading to a sharp expansion of antidumping investigations by the Department of Commerce and the U.S. International Trade Commission.
  • Between 1980 and 1990, U.S. firms brought more than 500 antidumping cases (see figure

Industrialized countries such as the U.S., Canada, Australia and the European Community were the traditional users of anti-dumping laws, mainly against developing countries in Asia and Latin America. Now developing countries use such laws against the industrialized countries.

  • According to economist Thomas Prusa, antidumping actions by traditional users have fallen from almost 90 percent of the total 10 years ago to about half today.
  • Just this year, Taiwan accused U.S. firms of dumping computer chips there, and Mexico has taken action against U.S. beef imports.

Anti-dumping laws are mostly just another form of protection. As Federal Reserve Board Chairman Alan Greenspan put it, anti-dumping actions "oftentimes are just simple guises for inhibiting competition." Many of the actions found to violate the anti-dumping laws, he notes, are perfectly legal in the domestic market, such as lowering prices when there is a fall in demand.

Source: Bruce Bartlett, senior fellow, National Center for Policy Analysis, December 6, 1999.


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