Antidumping duties were conceived as a surgical instrument. The original logic was elegant: prevent foreign producers from selling below cost to destroy domestic competitors, then raising prices once the competition was eliminated. Predatory pricing, in other words. A narrow remedy for a specific market failure.

That logic has almost entirely disconnected from contemporary practice. Today, antidumping investigations are initiated not primarily against predatory pricing but against any foreign price that undercuts domestic producers—regardless of whether the foreign firm is actually pricing below its costs or pursuing any predatory strategy whatsoever. The instrument designed to prevent market distortion has become a primary mechanism for creating it.

The transformation didn't happen by accident. It emerged through deliberate institutional design choices embedded in national antidumping laws and reinforced by WTO disciplines that proved insufficient to constrain them. Understanding this evolution matters because antidumping now affects hundreds of billions of dollars in global trade annually, shapes industrial location decisions, and increasingly serves as the template for new forms of trade restriction. The architecture of abuse is worth examining closely.

The economic case for antidumping rested on a specific theory: that firms might sell below marginal cost in export markets to eliminate competition, subsequently exploiting monopoly power. This predatory pricing rationale borrowed from domestic antitrust law. The problem is that predatory pricing is extraordinarily rare in domestic markets—and virtually unknown in international trade.

Consider the structural implausibility. For predation to succeed, the predator must absorb losses long enough to drive out competitors, then maintain barriers to entry sufficient to recoup those losses through monopoly pricing. In international markets, where competitors typically have home-market bases and where potential entrants exist across dozens of countries, achieving these conditions approaches impossibility. The academic literature has searched extensively for confirmed cases of international predatory dumping. It has found almost none.

Yet antidumping investigations and orders have proliferated dramatically since the 1980s. The United States, European Union, India, and China now maintain hundreds of active orders covering steel, chemicals, textiles, solar panels, and countless other products. If predatory pricing is rare, what are these measures actually targeting?

The answer is price discrimination—charging different prices in different markets—combined with simple price competition. Modern antidumping practice punishes foreign firms for selling at lower prices in export markets than in home markets, even when both prices exceed costs. It punishes them for competitive pricing that undercuts inefficient domestic producers. The conceptual foundation has eroded so completely that the practice now addresses a phenomenon unrelated to the original rationale.

This erosion matters institutionally because the legal architecture was built around assumptions that no longer apply. Procedures designed to identify predation instead capture ordinary competitive behavior. Standards of proof calibrated for market-destroying conduct apply to routine commerce. The institutional machinery operates on autopilot, processing cases according to its internal logic regardless of whether that logic connects to any defensible policy objective.

Takeaway

An instrument designed to prevent rare predatory behavior now routinely penalizes ordinary price competition—a gap between rationale and practice that persists because institutional machinery outlives the assumptions that justified its design.

The technical methodologies for calculating dumping margins are not neutral measurement tools. They are designed choices that systematically produce findings of dumping where economic analysis would find none. Three mechanisms deserve particular attention: zeroing, constructed value, and non-market economy treatment.

Zeroing represents perhaps the most egregious methodological distortion. When comparing export prices to home-market prices, some individual transactions will show the export price above the home-market price—what might be called 'negative dumping.' A fair comparison would offset these negative margins against positive ones. Zeroing instead treats all negative margins as zero, then averages only the positive margins. The result is inevitable inflation. Mathematical simulation demonstrates that zeroing can convert a genuine zero dumping margin into an apparent margin exceeding thirty percent.

Constructed value addresses situations where investigating authorities claim home-market prices are unreliable. Instead of comparing prices, they construct what the foreign producer's cost 'should' be, adding statutory minimums for profit and overhead. These constructions routinely exceed actual costs and actual prices. The methodology replaces market evidence with administrative assumptions designed to produce positive findings.

Non-market economy treatment goes further still. When investigating producers in designated non-market economies—a category applied to China despite its extensive market reforms—authorities reject both prices and costs from the investigated country. They substitute costs from 'surrogate' countries, often selected to maximize the resulting margin. A Chinese steel producer might be evaluated against costs from Thailand or Indonesia, regardless of actual comparative advantage.

Each methodology creates structural bias toward affirmative dumping findings. Combined, they function as a reliable mechanism for converting competitive imports into sanctionable conduct. The institutional design ensures that antidumping investigations produce the results that import-competing industries seek when they file petitions.

Takeaway

Dumping margins are not discovered through neutral measurement but manufactured through methodological choices—zeroing, constructed values, and surrogate country substitution—that virtually guarantee findings against competitive imports.

The World Trade Organization's Antidumping Agreement was supposed to constrain these abuses. The Dispute Settlement Body has indeed ruled repeatedly against specific practices—zeroing was found inconsistent with WTO obligations in case after case. Yet the practices persist, and overall antidumping usage continues to expand globally. Why has WTO jurisprudence failed to impose effective discipline?

The first limitation is remedy structure. WTO rulings require prospective compliance; they do not mandate compensation for past harm or removal of duties collected under unlawful methodologies. An administering authority can lose a dispute, nominally comply by modifying its methodology in future cases, and retain all benefits extracted through years of prior illegal practice. The incentive calculation favors initial non-compliance.

The second limitation is implementation discretion. Even when rulings clearly prohibit a practice, implementing compliance requires interpretation. Authorities have proven creative at developing alternative methodologies that preserve outcomes while claiming adherence to panel findings. Zeroing has been prohibited, recharacterized, prohibited again, and recharacterized again across successive disputes. The methodology evolves just enough to claim compliance while preserving essential bias.

The third limitation is capacity asymmetry. Bringing and winning WTO disputes requires substantial legal resources and technical expertise. Many affected exporting countries lack capacity to challenge antidumping measures effectively. The countries best positioned to use the dispute system—major trading nations—are often simultaneously the heaviest users of antidumping, creating mutual deterrence rather than discipline.

Perhaps most fundamentally, the WTO Agreement incorporated the conceptual confusion of existing antidumping regimes rather than imposing coherent economic standards. It regulates how antidumping should be administered rather than whether antidumping as practiced serves any legitimate trade policy purpose. The institutional architecture disciplines procedure while legitimizing a practice that economic analysis increasingly struggles to justify.

Takeaway

WTO jurisprudence has produced repeated rulings against specific antidumping abuses, yet the practice continues to expand—revealing the limits of procedural discipline over an institutionally entrenched system whose fundamental rationale remains unexamined.

Antidumping's evolution from technical remedy to protectionist workhorse illustrates a broader pattern in trade governance. Instruments designed for narrow purposes acquire constituencies, develop institutional momentum, and expand far beyond their original justification. The legal architecture becomes self-sustaining regardless of economic merit.

Reform requires acknowledging this institutional reality. Marginal procedural adjustments have proven insufficient. More fundamental questions deserve consideration: Should dumping be defined by reference to costs rather than price discrimination? Should competition-law standards replace trade-law standards? Should sunset provisions force genuine reconsideration rather than pro forma renewal?

The current system functions not as market correction but as market distortion by institutional design. Those who shape trade policy must decide whether that design serves the purposes we claim for it—or whether antidumping has become an anachronism that trade governance must outgrow.