Third-Country Dumping

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Third-Country Dumping

The act of exporting a good to a country where the exported good is much less expensive than an exported good from a different country. For example, suppose Countries A and B both export products to Country C. If A's exports are less expensive than B's exports of the same type (as well as C's domestically produced goods), people in C are more likely to buy from A. This can result in a handsome profit for the first exporter, but can be detrimental both to domestic producers and other exporters to the same country. Importing countries attempt to counteract dumping by setting up tariff barriers. Some countries peg their currencies artificially low so as to enable dumping. See also: Outsourcing.
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