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CA Foundation · Business Economics · International Trade

Which of the following is a standard argument against anti-dumping duties being applied indiscriminately?

Anti-dumping duties are justified only to counter exports sold below cost or below the home price that injure domestic producers. Applied indiscriminately, they become disguised protection that raises costs for consumers and invites retaliation. Dumping usually lowers prices in the importing country.

  1. ADumping always raises the prices of goods in the importing country
  2. BAnti-dumping duties are meant to offset only below-cost or below-home-price exports that harm domestic producers, so indiscriminate use can become disguised protectionCorrect
  3. CDumping can never harm domestic industries
  4. DAnti-dumping duties eliminate all trade deficits

Explanation

Anti-dumping duties are intended to counter exports sold at unfairly low prices that injure domestic producers. If used indiscriminately, they act as protectionism in disguise and harm consumers. Dumping typically lowers, not raises, prices in the importing country.

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