World trade organization rules allow countries

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Your textbook describes dumping as "when a foreign firm sells a product abroad at a price that is either less than the price it charges in its local market or less than its average cost to produce the product." The textbook also states that the World Trade Organization (WTO) rules allow countries to "apply a tariff any time a foreign firm dumps its product on a local market." Why would a home country punish a foreign country for subsidizing imports? Do you agree with this policy? Explain.

Reference no: EM133213625

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