Suppose that British Steel, Ltd., sells steel in Britain at $600 per ton and the same steel in the United States at $450 per ton. The price of equivalent steel produced in the United States is $550 per ton. How large an antidumping tariff (in percentage) will be applied on imports from British Steel if it is found that it dumped steel on the U.S. market?

Question

Quizplus · Accepted Answer

The dumping margin is calculated as the difference between the price in the exporting country and the price in the importing country. In this case, the dumping margin is:

$600 (price in Britain) - $450 (price in the U.S.) = $150

The normal value is the price of equivalent steel produced in the United States, which is $550 per ton. The dumping margin as a percentage of the normal value is:

$150 (dumping margin) / $550 (normal value) = 0.2727 or 27.27%

Therefore, the antidumping tariff will be the percentage equivalent to the dumping margin, rounded to the nearest tenth, which is 33.33%.

Suppose That British Steel, Ltd