Dumping is selling a product in a foreign market at a lower price than a firms own domestic market. You might think that this would require a comparison of actual prices charged in home markets compared to foreign markets. But that is rarely the case in the United States. For example, from 1995 to 1998, only 4 out of 141 cases of dumping used actual prices.
Instead, the U.S. Department of Commerce typically uses a constructed value method where it makes its own estimates of what prices in countries own markets would be based on available data on production costs, transportation, and other expenses and also a margin for profit and administration. In many cases, these are very crude and dated estimates. In other cases, they rely solely on the information provided by the parties who filed the complaint, who clearly have a vested interest in the outcome.
Perhaps this is why the Commerce Department virtually always finds that foreign countries are in fact guilty of dumping their products. Chinese companies have been accused of dumping for a wide array of products including crawfish, paint brushes, sodium nitrate, and plastic shopping bags. Critics of dumping believe that constructed values calculations overstate prices in domestic markets and inevitably lead to the conclusion that firms are in fact guilty of dumping their products.