A company is dumping if it is exporting a product at a price lower than its ‘normal value’. The normal value of a product is considered to be the profitable price of the product when sold in the domestic market of the exporting country or the cost of production plus a reasonable profit.

 

What is dumping?

 

Domestic price = 120

 

Export price = 100

 

Dumping margin = 20 ¬

 

An anti-dumping measure — usually in the form of a duty — is applied to counteract the injurious effects of dumped imports and restore fair competition. The measure is often based on the dumping margin1, which consists of a comparison between the export price and the normal value. This comparison is made for identical or comparable product types. To ensure fair comparison, adjustments may be applied for differences affecting price comparability such as differences in the conditions and terms of sale, levels of trade or physical characteristics.

 

Source: “TDI Trade defence instruments, Anti-dumping & Anti-subsidy - A Guide for Small and Medium-Sized Businesses” by the European Commission