Foreign manufacturers engage in the practice of “dumping” when they export products to the U.S. at prices below the established domestic market price or when they ship excessive quantities of products that cannot be explained by normal market competition. World Trade Organization (WTO) members, including the U.S., may take action to offset injurious dumping of products imported from another member under Article VI of the General Agreement on Tariffs and Trade. Under the Department of Commerce’s International Trade Administration regulations, U.S. domestic firms may file antidumping petitions claiming that imported goods are priced at “less than fair value.” The International Trade Commission may find there is “injury” to the U.S. domestic industry and impose “antidumping” duties on imported goods at a percentage rate calculated to counteract the dumping margin. The U.S. Trade Representative monitors trading partners’ activities, enforces U.S. rights under trade agreements, and negotiates and signs trade agreements that advance the President’s trade policy.
The Investigation Process. The U.S. Department of Commerce and the U.S. International Trade Commission (ITC) jointly administer America’s cumbersome antidumping law. The steps in a dumping case are as follows:
1) A U.S. company submits a petition to the International Trade Administration at the Department of Commerce, alleging that a foreign company is dumping its product in the U.S.
2) If the Commerce Department determines that sufficient evidence exits, it will proceed with an investigation.
3) The ITC then may start its own investigation to determine whether there is injury to any domestic companies.
4) If the ITC finds there has been material injury to a U.S. company, the Commerce Department will determine whether the product in question is being sold in the U.S. at “less than fair value,” or at a lower price than that sold in the home market or a third country market.
5) If the Department issues a preliminary finding that sufficient evidence of such pricing practices exists, it will direct the U.S. Customs Service to suspend the importation of the product, or require U.S. importers of the product to post a deposit. This bond must be paid to the U.S government in the event that a final determination finds that the product is being sold at less than fair value.
6) The ITC, at this point, must determine if there is any actual material damage to U.S. companies caused by the alleged dumped imports.
7) If the ITC determines that the dumping has caused injury to a U.S. manufacturer, the products then are subjected to “antidumping duties” equal to the amount of the determined dumping margin. The dumping margin is the difference between the price of the “dumped product” and the price the product would sell for if it were being sold at a “fair” price, according to calculations by the ITC. If, however, the ITC finds that there is insufficient evidence, the case is dismissed.