Final answer:
The claim is false; antidumping laws are designed to prevent the practice of selling imported goods below the cost of production, not to prevent foreign investment. Their focus is on fair trade and protecting domestic industries from dumping; evidence of their economic justification is considered weak.
Step-by-step explanation:
The statement that antidumping laws were specifically designed to prevent foreign producers from investing in the U.S. local markets is false. Antidumping laws are laws that block imports sold below the cost of production and impose tariffs that would increase the price of these imports to reflect their cost of production. The primary goal of these laws is to protect domestic industries from unfair competition due to dumping, which refers to the practice where a company exports a product at a price lower than the price it normally charges in its own home market. This is different from preventing foreign investment; rather, it's about ensuring fair trade practices. In economic theory, the rationale behind anti-dumping laws is seen as weak, since the market should be governed by demand and supply, and there are no guaranteed profits for firms. Furthermore, it is often difficult to find concrete evidence of predatory pricing strategies by foreign firms, and there are no documented cases where foreign producers have raised prices significantly after eliminating domestic competition.