Originally Posted by
Newpublius
Dumping does more than that though. On products being actively dumped, or receiving an export subsidy, consumers in A do pay less for the product. But investors note the possibility B can provide export subsidies, so investors in A don't know whether they should enter markets where they can supply cheaper than B, so they don't. The result in this circumstance is people in A pay more because the people in A who can compete decide they can compete with B's companies but not B's companies and their government guarantors.
Right now, today, I should be in Wilkes-Barre, PA, producing products CHEAPER than China, but I won't do it because China MIGHT provide export subsidies (or increase them as the case may be)