The Cost of Antidumping: the Devil is in the Details

We argue that the costs of antidumping (AD) protection are substantially higher than standard tariff analysis would suggest. First, since AD duties are often adjusted during administrative reviews, the welfare cost of AD duties increases over time. These adjustments effectively transfer heavily distorted AD revenue to foreign firms. Second, AD duties are more costly than simply the visible costs of AD protection. There are significant additional costs associated with the prospect of protection imposed when foreign and domestic firms alter their profit maximizing behavior in order to influence the outcome of potential AD investigations. These costs may exceed the direct cost of AD duties.