Question

In 2005, country A exported steel worth $5 billion to country B. Steel producers in country B alleged that country A was ________steel into country B because country A’s selling price was 20% lower than the normal value. When the claims were proved valid,
A.)dumping
B.)importing
C.)smuggling

country B imposed _________of 20% on steel imports from country A.

A.)an antidumping duty
B.)an import quota
C.)a service charge

Answer 1

Answer: (1) Option (A) is correct.

(2) Option (A) is correct.

Explanation:

(1) Dumping refers to the term that is mostly used in the international trade. When a country exporting a certain commodity in the foreign country at a lower price than it will be sell in a domestic market, is known as dumping.

But according to the world trade organization it is legal unless the importing country will be able to show the negative effects on their domestic producers from the exporting country.

(2) An antidumping duty is a type of protectionist tariff that a foreign country uses to discriminate against imports because government of the foreign country believes that price is too below the fair market price.

Hence, country A export steel at a lower price to country B than it is in the domestic market of country A. So, country B alleged that country A dumping steel into country B.

That's why, the government of country B implemented an antidumping duty of 20% on the imports from country A.