Input Tariffs as a Way to Deal with Dumping

by Susan E. Skeath
November/December 1993

The General Agreement on Tariffs and Trade (GATT) has significantly reduced the use of tariffs as barriers to international trade in today’s marketplace. The existence of antidumping legislation, however, provides American industry with a method of procuring protection when the pressures of international competition become oppressive. Many American companies have taken advantage of the legislation and claimed injury at the hands of unfair competition from abroad, often winning the imposition of punitive duties on competing imports as compensation for previous underpricing. This article uses an analytical model to explore in detail an intriguing antidumping case, initiated in mid-1990, involving flat-panel display screens for laptop computers. The vertical relationships between laptop screen and laptop computer producers make the results of the analysis applicable to a wide variety of international industries with vertically integrated or vertically related firms.

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