Infant-industry argument has logical validity, most economists feel that if infant industries are to be

Subsidized, there are better means than tariffs for doing it. Direct subsidies, for example, have the

Advantage of making explicit which industries are being aided and to what degree.

The protection-against-dumping argument for tariffs contends that tariffs are needed to protect

firms from foreign producers which “dump” their excess goods onto the domestic market at

Less than cost. Two reasons have been suggested as to why foreign firms might wish to sell at below

Cost. First, these firms may use dumping to drive out domestic competitors, obtain monopoly power

And then raise prices. Second, dumping may be a complex form of price discrimination —

Charging different prices to different customers. The foreign seller may find that it can maximize its

Profits by charging a high price in its monopolized domestic market while unloading its surplus

Output at a lower price in another country — Russia, for example.

Dumping is a legitimate concern. Allegations of dumping require careful investigation to determine

Their validity. Foreign producers often allege that dumping allegations and antidumping duties

, are a method of restricting legitimate trade. The fact is that some foreign firms can produce

≪main goods at substantially less cost than can their competitors. Hence, what on the surface may