Question: California producers of sea salt protest to the American government that they cannot compete with...

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Question: California producers of sea salt protest to the American government that they cannot compete with the same product imported from China. How do the California producers want the United States government to respond? May the U.S. government legally oblige? Strategy: Domestic producers who cannot compete with foreign competition typically ask their government to impose higher tariffs on the imported goods. However, the whole point of GATT, and the WTO, is to avoid trade wars. There are two instances in which the U.S. government is free to levy increased duties on the Chinese goods. What are they? Result: When a company dumps goods, it sells them overseas at an artificially low price, generally to destroy competition and gain a foothold. That is illegal, and the domestic (U.S.) government may impose dumping duties to protect local producers. Subsidized goods-those supported by foreign company's government-are also illegal. If the United States govern- ment can demonstrate illegal subsidies, it will impose countervailing duties designed to give all producers an equal chance.