Legal Definitions - dumping

The term dumping has two primary meanings in a legal and economic context:

• 1. In International Trade: This refers to the practice where a company exports products to another country at a price lower than their normal value, which is typically the price charged in the exporter's home market, or even below the cost of production. This practice is often considered unfair if it causes or threatens to cause significant harm to the domestic industry in the importing country.

  • Example 1 (Consumer Goods): A major appliance manufacturer based in Country A begins selling its washing machines in Country B for $300, while the same model sells for $550 in Country A. This significantly lower price in Country B makes it very difficult for local washing machine manufacturers in Country B to compete, potentially forcing them to reduce production, lay off workers, or even go out of business. This scenario illustrates dumping because the goods are sold abroad at a price substantially below their home market value, potentially harming the domestic industry.

  • Example 2 (Industrial Materials): A chemical company from Nation X sells a specific industrial solvent to manufacturers in Nation Y at a price that is not only below what it charges its own domestic customers in Nation X but also below the actual cost of producing the solvent. This aggressive pricing strategy could severely undercut Nation Y's domestic chemical producers, who cannot match such low prices and still remain profitable. This demonstrates dumping as the product is sold at an unfairly low price in a foreign market, threatening the local industry.

• 2. In Environmental Law: This refers to the illegal disposal of waste materials into the environment, such as land, water, or air, without proper permits or in violation of environmental regulations.

  • Example: A trucking company, seeking to avoid the fees associated with proper waste disposal, repeatedly drives to a secluded area near a protected wetland and unloads barrels of used motor oil and other industrial fluids directly onto the ground. This act is considered dumping because it involves the unauthorized and harmful disposal of waste into a natural environment, violating environmental protection laws designed to prevent pollution.