How does dumping affect international trade?

Dumping negatively impacts international trade by unfairly disrupting competition in foreign markets. When a company sells a product in a foreign market at a price lower than its normal value, often below production costs, it can undercut local businesses that cannot compete with such low prices. This predatory pricing strategy can lead to significant challenges for foreign producers, potentially driving them out of the market and reducing overall competition.

The consequences extend beyond individual companies; entire industries in the affected countries may struggle to survive due to the artificial price advantages enjoyed by the dumping company. Ultimately, this can lead to market monopolies or oligopolies, harm job creation, and influence trade dynamics in detrimental ways.

Understanding the impact of dumping is crucial for policymakers and businesses, as it informs regulations and trade agreements aimed at ensuring fair competition. The other options, while related to international trade, do not accurately reflect the primary consequence of dumping, which is the disruption of fair market competition.