What Is Predatory Dumping? The Following Is Understanding And Examples

Illustration of product exports for predatory dumping practices (Photo: Pixabay/Bernhard1960)

YOGYAKARTA Do you know what predatory dumping is? This term is quite popular in international trade. Predatory Dumping is part of dumping politics.

Dumping itself is a policy of selling goods abroad at a cheaper price than domestically.

Thus, dumping politics can be interpreted as a price discrimination policy to kill foreign markets where products are sold at a lower price.

Well, in this article, VOI will specifically discuss predatory dumping, a part of dumping politics aimed at capturing markets in other countries.

Summarized from various sources, predatory dumping is an attempt to prey on business competitors using low prices. After the market share has been captured and Binis' competitors move out of the market, predatory dumping players will monopolize the market to increase prices as desired.

Quoted from the Investopedia page, predatory dumping actors initially carried out a loss-selling action. So that this process can run, predatory dumping actors must apply to cover losses until their business competitors go out of business.

Predatory dumping can be achieved by conducting crossed subsidies for product sales. For example, selling products at a higher price in the country of origin. Meanwhile, exported products are sold at a cheaper price.

When domestic producers and other players in the market start to be eliminated, predatory dumping actors must get a monopoly status, making it possible to increase product prices according to their wishes.

According to the World Trade Organization (WTO), predatory dumping is an illegal act for harming domestic business actors.

Countries that can prove this are given permission by the WTO to implement anti-dumping measures. So that the government can impose strict duties on imported products.

Anti-dumping measures have been used in many countries. However, this action only aims to protect business actors in the country.

Examples of Predatory Dumping

Here are examples of predatory dumping behavior:

That's the information about what predatory dumping is. Hopefully this article can add insight to the loyal readers of VOI.ID.