Relief from Foreign Competition:
Antidumping and the Escape Clause
We have seen how trade policies aimed at reducing imports also reduce exports and employment elsewhere in the economy. Yet import restrictions are often justified as a way of providing relief to industries suffering from “unfair” foreign competition. Antidumping laws, which provide a means for tariffs on unfairly low-priced imports, have become the primary instrument for addressing such concerns. This chapter examines the U.S. antidumping laws and asks whether they provide a remedy for unfair trade, or are merely a convenient mechanism for protecting an industry from imports. We will also look at the escape clause procedure, which can provide industries with temporary relief from imports without the claim of unfair trade. Finally, we will examine whether trade protection really helps industries such as textiles and steel adjust to foreign competition and become more competitive.
We are all familiar with the claim that imports cost jobs. But many people are also afraid that American industries are being harmed by unfair foreign trade practices. These include export subsidies and the dumping of goods at low prices that undermine the sales of U.S. firms. To counter such practices, the United States enforces several “fair trade” laws that allow import tariffs to be imposed. For example, when a foreign government subsidizes its exports to the United States, the subsidy is considered to be an actionable unfair trade practice if it injures domestic producers. Of course, from a strictly economic point of view, an importing country might well benefit from receiving subsidized goods. Even if the