Magnesium Anti-Dumping Case Study Essay

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Dumping is an approach to selling goods on the foreign market at reduced prices to displace competitors. Companies use it to capture new markets and oust other manufacturers (Hill, 2021). In 2002, a large U.S. magnesium company alleged that Russia and China use harsh dumping strategies. Even though World Trade Organization (WTO) does not prohibit dumping, Russian and Chinese manufacturers can be claimed to be guilty of abusing their dumping power. Although International Trade Commission (ITC) imposed tariffs for Russia and China, the U.S.A. still left the least competitive stakeholder.

Russia, China, and the U.S.A. were involved in the magnesium dumping, which caused major debates. The two neighboring producers used their trading abilities to the extent that the import increased by 70%, while the price was reduced by 40%, which put a strain on the American manufacturer (“Magnesium from China and Russia”, 2011). These changes resulted in a double increase in market share. Nonetheless, the U.S. magnesium company could justify its claims by specifying that foreign supply of goods ruined the supply and demand chain between 2002 and 2003. The American producer gained much support for it was promised the amassing number of consumers and the rise of tariffs on imports from the foreign countries. Although International T

The International Trade Commission (ITC) posed that the Americans had a favorable position. The commission considered miscellaneous factors affecting the situation; however, the ruling worsened the position of consumers since the American market set higher prices on magnesium. The increase in cost was seen until 2010 and reached its annual optimum of $2.15 (“Magnesium from China and Russia”, 2011). Nonetheless, the trade fair was ensured so that foreign manufacturers could remain in the American market. I do not consider the ruling just as it threatened the position of the U.S. and made the manufacturer uncompetitive in the foreign markets.

References

Hill, C. W. L. (2021). Global business today (12th Ed.). McGraw-Hill Education.

(2011). U.S. International Trade Commission.

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