Question

the u.s. has recently imposed duties on chinese steel accusing the country of supplying the product at artificially low prices which are below the cost of production. if china is in fact doing this, the practice is called

Answer 1

The practice of selling products below the cost of production is known as dumping, which is countered by U.S. anti-dumping laws through tariffs. These laws adhere to WTO standards to maintain fair trade and protect domestic industries.

Step-by-step explanation:

The practice of a country supplying products at artificially low prices, which are below the cost of production, is called dumping. The U.S. anti-dumping laws serve to prevent this by blocking imports sold below production costs and imposing tariffs to raise the price of these imports to reflect their actual cost of production.

Engaging in dumping may be part of a long-term strategy where foreign firms sell goods below cost to drive out domestic competition, and then raise prices once competitors have been eliminated, a practice sometimes referred to as predatory pricing. Anti-dumping complaints, such as the ones against Chinese steel, are not only common but have been on the rise globally and are regulated under World Trade Organization (WTO) rules. Countries subject to unfair trade practices file complaints with the WTO to seek remediation, thus enforcing fair trade standards and protecting their industries.