Dumping

By:

James Knight

James is a lead editor for Invezz, where he covers topics from across the financial world, from the stock… read more.

Updated: Aug 20, 2021

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A term used in international trade for the unloading of large quantities of a particular product in another country at a low price. This may be done where the first country is over-producing and wishes to sell at a low profit rather than at none at all (or even to sell at a loss, so that it may get a foothold in the other market). Again, it can be a rather ruthless way of maximizing the profit of a particular industry. Where there is a monopoly at home output is restricted and a high price charged. The bulk of the output is then pushed into another country and sold at prices which producers in that country cannot afford. Dumping is therefore frowned upon by governments, and steps are often taken to prevent it happening. These may be direct, e.g. by duties, or indirect, e.g. by retahatory action.

Reference: The Penguin Business Dictionary, 3rd edt.