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To: Toddsterpatriot
Do you have any examples where this actually occurred? I guess after driving competitors under, these "dumpers" would raise prices? You have any examples where this actually occurred?

There is a lot of information at the U.S. Antidumping Database Webpage

Pricing information is difficult to obtain. I researched some allegations a while back and companies were shipping into the US through Customs with a higher declared value and then selling them at very different (lower) prices. Also, the purchaser is unlikely to complain if they are paying less. I do know of some specific cases and they are in the anti-dumping database. One of them resulted in the last US producer of a specific product going under.

The lower prices usually result from either government subsidies that enable the foreign producer to sell low and the other is where a company will lower and raise prices with demand to keep a certain level of production to keep their total costs at a minimum regardless of profit. They have a certain fixed cost at every production level. In one scenario they continue to produce without orders, bring them here and hold them in bonded warehouses so they are not paying tariffs, and then unload them as soon as the market begins to pick up again. In another they just sell them dirt cheap e.g., buy one get one free, in order to make sales when there is a depressed demand. Either way, they are selling below cost.

In many industries there are significant barriers to entry such as being very capital intensive. Once competition is eliminated in theses industries it is less likely that a startup will fill the void. For example, would you build a steel mill if there were short-term profits to be made but in the long run a flood of cheap imports will put you under? You would have to have a certainty of sustained profits for a long time to offset the required capital investment. Many industries run on very slim profit margins so a movement of a few percenatge points in price would be all it would take. Some items could be $1/2 million per unit and they operate on a five percent margin. If someone drops the price by 10 percent, no one else can realistically meet it. An order of twenty units would be $10 million so a ten percent savings would be $1 million - easily enough to sway a purchaser. So the price movements don't have to be drastic to have the desired effect.

207 posted on 04/05/2005 9:07:57 PM PDT by L_Von_Mises
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To: L_Von_Mises
I do know of some specific cases and they are in the anti-dumping database. One of them resulted in the last US producer of a specific product going under.

Sounds like a great example. What was the good, who was the US producer and how much did the dumper raise prices after the US company went under?

208 posted on 04/05/2005 10:46:45 PM PDT by Toddsterpatriot (Maybe it's not the Alinsky Method. Maybe you appear ridiculous because you are ridiculous!!!)
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