Predatory Dumping
Categories: Ethics/Morals, Regulations, International
See: Dumping.
Basically, predatory dumping is the active selling of a product at a price below production cost, with the intent to bankrupt competitors, so that when they’re gone, the predator can swoop in and charge whatever they want.
So, similar to predatory pricing...dumping is the export of product from one country to another at a price below the price at which it sells that product domestically.
Extreme example:
Somalia finally gets its act together as a country and, instead of spending efforts on pirating and assisted genocide, they decide to make cars. Way to diversify. They’re funded by Pirates-R-Us, the most profitable um...bank, on earth. And they make trucks. The kind you always see terrorist CNN shots of huge dents, bumps, and scratches. But the trucks keep running just fine. Even on three wheels.
So Somalia makes trucks just like this, and dumps them in the U.S. for 10 grand each. After five years of this dump, Ford, GM and Toyota...the big three truck makers...are all dead. Nobody wants to pay three times what the “Arab Warlord” costs, in order to buy a truck that’s American-made. When those big three are gone, Somalia then raises prices above where they were, i.e., instead of their trucks selling for 10 grand, they now sell for 40 grand, reaping huge rewards.
So, you’d ask yourself, "Is this…bad? Is this illegal? Is it even sustainable? Like, what if they do dump for 5 years and lose literally billions? Won’t new competition come in and then destroy the company? Consumers will then have benefited from the low, 5-year dumping prices, so...it’s free trade? Why not let it be free?"
Good questions to noodle while you’re, um…dumping.
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Cost Accounting: What is Dumping?0 Views
And finance Allah Shmoop What is dumping up Oh well
yeah I guess it's like that And you might recognize
this excellent scene directed by Bob Zemeckis It won the
porcelain pony on Yeah if you never saw it or
need a refresher What is predatory pricing Well basically it's
the act of selling of a product at a price
below production cost with the intent to bankrupt competitors so
that when they're gone while the Predator can swoop in
and charge whatever pricing they want while similar to predatory
pricing dumping is the export of product from one country
to another at a price below the price at which
it sells that product domestically Alright extreme Somalia finally gets
its act together as a country and instead of spending
efforts on pirating and assisted genocide they decide to make
cars and waited diversify their guys They're funded by pirates
Are us the most profitable bank on earth and they
make trucks You know the kind You always see terrorists
CNN shots of you know huge dance bumps and scratches
but the trucks keep running just fine like even on
three wheels So Somalia makes trucks just like this and
dumps them in the U S for ten grand each
Well after five years of this dump for GM and
Toyota the Big Three truck makers are all dead Nobody
wants to pay three times what the terrorist warlord model
costs in order to buy a truck that's American made
when those Big Three or gone Somalia then raises prices
above where they were AII instead of their truck selling
for ten grand they now sell him for forty grand
reaping huge rewards So you'd ask yourself Is this bad
Is this illegal Is this even sustainable Like what if
they do dump for five years and lose billions Won't
new competition come in and destroy the company Consumers will
then have benefited from the low five year dumping prices
So it's free trade Why not let it be free
Well good questions to noodle on you know while you're 00:02:07.35 --> [endTime] dumping