From Cato's Dan Ikenson, writing in Forbes:
The U.S.antidumping law still enjoys broad bipartisan support in Congress and within pockets of the executive branch. Although some of that support can be chalked up to politicians representing the narrow interests of influential constituencies that have mastered the use of antidumping as a bludgeon to cripple the competition, much more support stems from a fundamental misunderstanding of the purpose, history, mechanics, and consequences of the law.
Too many policymakers passively accept the anachronistic rationalizations proffered by the steel industry, labor unions, other big antidumping users, and their hired guns in Washington. Too many buy into the idealized imagery of a patriotic, upstanding American producer working tirelessly to ensure the preservation of well-paying jobs for hard-working Americans, but is suffering the ravages of unscrupulous, predatory foreign traders intent on destroying U.S. firms and monopolizing the U.S. market. What politician could oppose a law presumed to protect that kind of a company against that kind of a scourge?
But when the curtain is peeled back, exposing the reality of the operation of the U.S. antidumping law, one discerns a very different reality. Antidumping measures always raise the costs of firms in downsteam industries that rely on the affected imports. The law routinely claims domestic firms as victims. The law is often used as a tool by domestic firms waging battle for supremacy over other domestic firms. Sometimes foreign-owned firms are the petitioners and U.S-owned firms are the respondents. Rarely does the law lead to job creation or job restoration in the domestic industry. And never is the allegation of “unfair trade” substantiated, or even investigated. Myth and misinformation explain the persistence of the U.S. antidumping regime.
Much more detail in Cato's latest Trade Policy Analysis: Protection Made to Order: Domestic Industry's Capture and Reconfiguration of U.S. Antidumping Policy. From the conclusion:
U.S. antidumping law no longer seeks to advance the pro-competition objectives of its original charter. What began as an outgrowth of antitrust intended to discipline predatory pricing—and, therefore, to safeguard competition—was gradually transformed into a mishmash of rules and discretion that enables inefficient, uncompetitive behavior on the part of domestic firms at great cost to other domestic entities.
Antidumping has done little, if anything, to focus the spotlight on the alleged sources of unfairness that presumably give rise to cross border price discrimination. By systemically disregarding that kind of inquiry, antidumping’s overseers have blurred any distinctions between possibly objectionable price discrimination and the kind that is the product of profit-maximizing decision making. Furthermore, market access barriers and transportation costs have fallen precipitously since the establishment of antidumping policy, removing the impediments to arbitrage necessary for cross border price discrimination to occur without undermining the market power of the foreign producer.
