With the virtual elimination of tariffs and quotas under GATT, antidumping measures emerged as a key instrument of protection. Under antidumping actions exporters can either raise the price to eliminate the dumping margin or pay an antidumping duty. This paper analyzes the incentives to exporters to choose between duty or settlement outcomes and finds that due to the smaller loss in market share exporters may prefer an antidumping duty over voluntary settlement. The paper analyzes the welfare implications of these outcomes and finds that they are ambiguous.

This paper is ... interested in the pricing behavior of exporting firms and their responses to variations in costs and trade barriers. In doing so, we pay particular attention to anti-dumping duties and their special place among other geographical and trade barriers. ... Unlike the case of tariffs or countervailing duties, the implementation of anti-dumping measure is directly contingent on the prices of imports. Therefore the manner in which anti-dumping duties affect decisions of price-setting firms is different from that of any other trade barriers. That was pointed out by Marston (1990) and Blongen and Haynes (2002) but so far proper theoretical analysis of this trade policy instrument has been lacking. ... This paper aims to fill this gap by developing a simple pricing-to-market model in a linear demand specification. We show that the pass-through of anti-dumping duties is fundamentally different from that of tariffs, costs, or exchange rates. This theoretical notion is then supported by the empirical evidence. ... Proper understanding of the anti-dumping duty pass-through mechanism helps improve the accuracy of trade policies and the analysis of their welfare implications.

This study examines the imposition of anti-dumping (AD) duties on imported products in Korea. We use panel data for Korean firms between 2000 and 2012 and estimate the firm-level productivity of import-competing firms before and after AD imposition. Using a difference-in-difference framework, we compare firm productivity changes in a treatment group that receives AD protection to a control group that does not. In contrast to recent findings on the effects of AD measures, we find that the average protected firms experience productivity loss during the AD protection period. Examining the changes in external market condition and internal resource allocation during the protection period, such loss appears to be more evident inside highly concentrated import-competing sectors. Further, we find that protected firms are more likely to reallocate their resources abroad via FDI at the expense of domestic production and investment once they receive temporary protection.

A Foreign Affairs Best Book of the Year: “Tells the history of American trade policy . . . [A] grand narrative [that] also debunks trade-policy myths.” —Economist Should the United States be open to commerce with other countries, or should it protect domestic industries from foreign competition? This question has been the source of bitter political conflict throughout American history. Such conflict was inevitable, James Madison argued in the Federalist Papers, because trade policy involves clashing economic interests. The struggle between the winners and losers from trade has always been fierce because dollars and jobs are at stake: depending on what policy is chosen, some industries, farmers, and workers will prosper, while others will suffer. Douglas A. Irwin’s Clashing over Commerce is the most authoritative and comprehensive history of US trade policy to date, offering a clear picture of the various economic and political forces that have shaped it. From the start, trade policy divided the nation—first when Thomas Jefferson declared an embargo on all foreign trade and then when South Carolina threatened to secede from the Union over excessive taxes on imports. The Civil War saw a shift toward protectionism, which then came under constant political attack. Then, controversy over the Smoot-Hawley tariff during the Great Depression led to a policy shift toward freer trade, involving trade agreements that eventually produced the World Trade Organization. Irwin makes sense of this turbulent history by showing how different economic interests tend to be grouped geographically, meaning that every proposed policy change found ready champions and opponents in Congress. Deeply researched and rich with insight and detail, Clashing over Commerce provides valuable and enduring insights into US trade policy past and present. “Combines scholarly analysis with a historian’s eye for trends and colorful details . . . readable and illuminating, for the trade expert and for all Americans wanting a deeper understanding of America’s evolving role in the global economy.” —National Review “Magisterial.” —Foreign Affairs

Explains process of importing goods into the U.S., including informed compliance, invoices, duty assessments, classification and value, marking requirements, etc.