dumping

             As we have studied in class, dumping occurs when a foreign producer sells a product in another country at a price that is below its fair market value, or lower than the cost of production. The difference between the price in the foreign market and the price in the US market, for example, is called the dumping margin. Unless the conduct falls within the legal definition of dumping as specified in U.S. law, a foreign producer selling imports at prices below those of American products is not necessarily dumping.
             Foreign governments subsidize industries when they provide financial assistance to benefit the production, manufacturing, or exportation of goods. Subsidies can take many forms, such as direct cash payments, credits against taxes, and loans at terms that do not reflect market conditions. Regulations establish standards for determining when an unfair subsidy has been granted. The amount of subsidies the foreign producer receives from the government is the basis for the subsidy rate by which the subsidy is offset, or "countervailed," through higher import duties.
             If a U.S. industry believes that it is being injured by unfair competition (yeah right) through dumping or subsidization of a foreign product, it may request the imposition of an antidumping or countervailing duty by filing a petition with the ITA and the USITC. Then begins an investigation to determine whether foreign producers and governments have "dumped" or have unfair subsidies. The U.S. then calculates the amount.
             If both the ITA and the USITC make affirmative preliminary determinations (190 days of initiation), importers are required to post a bond or cash to cover an estimated amount for the duties which would be collected in the event that an AD or CVD order is issued upon the completion of the investigations. Typically, the final phases of the investigations by IA and the ITA are completed within 12 to 18 months of initiation.
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