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January 26, 2018
Shouldn't the government stop anti-competitive practices?
A few days ago President Trump put temporary tariffs on washing machines and solar panels as a response to years of complaints from American manufacturers about unfair competition and dumping by foreign companies. The Wall Street Journal and others derided the tariffs as anti-trade, protectionist and bad for consumers. (Samsung announced a $50 price increase due to the tariff, but also a new plant in Tennessee.) Maybe a closer look at what is going on is in order. it is actually illegal to dump or to sell below cost in order to destroy competition. According to Wikipedia: Predatory pricing (also undercutting) is a risky and dubious pricing strategy where a product or service is set at a very low price, intending to drive competitors out of the market or create barriers for potential new competitors. Theoretically if competitors or potential competitors cannot sustain equal or lower prices without losing money, they go out of business or choose...(Read Full Post)