Dumping is the export of goods from the country at lower prices than domestic prices, carried out to drive out competitors and capture foreign sales markets. Dumping can be carried out both at the expense of the exporting company and at the expense of the state through subsidizing exports from the state budget.
Dumping is also understood as a method of non-tariff trade policy of international marketing, which consists in promoting goods to the foreign market by reducing export prices below the level existing in the exporting country.
Dumping is a type of unfair competition. Its immediate goals are to increase sales and market share, eliminate competitors and strengthen market control, freeing up surplus inventories. In addition, dumping can be carried out for political purposes, when an economically powerful country resorts to dumping in trade with less developed countries, seeking to suppress producers in these countries and thereby establish economic control over them.
Losses from the sale of goods at dumping (reduced) prices can be covered in different ways: by selling other goods at higher prices that have no serious competitors; selling a similar product at high prices after driving out a competitor from the market; receiving subsidies from the state, thus stimulating exports. In the latter case, a decrease in prices for export goods is compensated by an increase in prices in the domestic market, while losses from dumping prices are compensated by taxpayers.
In the modern world, there are two types of dumping: price and cost. Price dumping is the sale of a product in the export market at a price lower than its average price in the domestic market. Value dumping is the sale of a product in the export market at a price below the value of the product.
To prevent dumping, states use various instruments, for example, a voluntary restriction of imports, a decrease in the volume of supplies to this market. Antidumping duties are considered to be the main tool in the fight against dumping. They are a type of indirect tax that increases the burden on the import price. Anti-dumping duties are in addition to regular customs duties and are countervailing duties, i.e. correspond to the difference between normal and dumping prices.
