International trade may be distorted when an enterprise effectively reduces the foreign price of its product below that of the domestic price, where any such difference is not due to actual differences in the cost of selling, production, or transportation. The price reduction may be disguised by quality differentials, spurious quantity discounts, or favourable credit terms. Governments may support such forms of export through special export subsidies, tax rebates, or other special concessions.
Dumping is an unfair trade practice requiring regulation by national and international agencies.
Accusations of dumping are being used to impose discriminatory protection of local interests by erecting trade barriers and promoting local industry.