Those above-normal profits then provide a war chest that allows a foreign producer to undersell its rivals in overseas markets. Most of the methodologies used by the U.S. Commerce Department to calculate dumping, however, have no bearing on the existence of such price discrimination. Obviously, such comparisons cannot reveal price discrimination for the simple reason that actual price data are not used for one side of the equation. In a study of the U.S. anti-dumping law published recently by the Cato Institute. Meanwhile, even when price discrimination between home and export markets is reliably established, a sanctuary market is only one of many possible explanations.
Companies charge different prices in different markets for all kinds of reasons.
For example, a company may have a strong reputation at home as a reliable supplier of high-quality products, while abroad it is less well known and may have to accept lower prices on its export sales. And even if the home market is open, such price differences will not necessarily be arbitraged away. Such below-cost sales allegedly reveal the existence of foreign government policies that allow the company to sustain losses and ignore normal market signals. Not a single methodology used by Commerce in calculating dumping margins measures whether U.S. imports are sold at a loss. The closest Commerce comes is when it compares U.S. prices to constructed value, which is equal to the cost of production plus profit.