The U.S. Department of Commerce’s approach to targeted dumping: the wrong test and the wrong response

Abstract

The U.S. Department of Commerce (DOC) defines targeted dumping as a pattern of significant differences in the prices that importers charge in the U.S. to different purchasers, in different regions, or during different periods. If DOC finds targeted dumping, then it calculates the average dumping margin using zeroing, a practice that increases the calculated dumping duty. This article shows that DOC is using an inappropriate statistical test in targeted dumping investigations. The article also shows that a finding of targeted dumping does not justify the use of zeroing, an inherently flawed methodology that DOC has discarded in cases without targeted dumping.