IT WAS a flood of cheap steel from an intimidating new economic power that prompted the passage of the world’s first anti-dumping law. In 1904 Canada’s parliament, angered by soaring imports of cut-price steel from America, imposed punitive tariffs. America is now on the other side of a similar trade dispute. Last year China exported over 100m tonnes of steel—more than the entire output of all America’s mills. Only 3% of that went to America, but American steelmakers squealed all the same and in March the government announced plans to impose an anti-dumping tariff on steel imports from China (and a handful of other countries) of up to 266%. The instinct behind such measures is understandable, but no good will come of them.
Dumping is the practice of selling goods in foreign markets at an unfairly low price—typically, one lower than the going rate in the exporter’s home market. Anti-dumping measures are intended to prevent a company from selling goods below cost in order to drive competitors out of business, before using the resulting market power to gouge customers.
The threat was all too real when Canada adopted its...Continue reading
Source: Business and finance http://ift.tt/1N7iiph
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