Predatory Dumping

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.