Dumping: What it is and its impact on international trade

In an increasingly globalized world, international trade has become a key driver of economic development and resource optimization. However, this openness also exposes economies to unfair practices such as dumping, which can distort competition and create financial imbalances.

What is dumping?

Dumping is an unfair trade practice that consists of exporting goods at prices below their production cost or lower than the sales price in the domestic market. This strategy usually aims to gain market share in new territories through artificially low prices, either by means of state subsidies or by accepting short-term losses.

From an economic perspective, dumping can cause significant distortions in competition, negatively affecting local companies in the importing country. Although this practice may bring immediate benefits to consumers, such as lower prices, it also threatens the long-term sustainability of domestic productive sectors.

What impact does it have on international trade?

In a globalized context, dumping represents a risk to market stability and fair trade. Receiving economies, especially those with sensitive sectors, may see their domestic production weakened, leading to consequences such as:

Displacement of local industry: domestic companies are unable to compete with below-cost pricing, forcing them to scale down operations or exit the market.

Loss of jobs in strategic sectors: the contraction of local industries directly affects employment, particularly in labor-intensive sectors or those with high national value added.

Increased external dependency: as domestic suppliers disappear, dependency on international players grows, which may compromise the country’s economic security.

Risks to economic resilience: concentrating supply in foreign hands leaves economies vulnerable to disruptions in logistics chains or unilateral decisions by external providers.

Our commitment at BBVA CIB against unfair practices

Aware of this challenge, BBVA Corporate & Investment Banking (CIB) carries out continuous and rigorous monitoring and analysis of the international trade environment, with a focus on:

Monitoring trade flows and tariff alerts to detect potential deviations that may signal risks.

Assessing the impact of dumping on key sectors within the investment portfolio, especially in industries sensitive to unfair competition or with high exposure.

Systematically reviewing trade agreements.

Promoting corporate policies aligned with regulatory compliance, fair trade, and sustainability, while integrating ESG criteria into our business strategies.

At BBVA CIB, we reaffirm our commitment to transparency, business ethics, and the promotion of a fair business environment. In this complex and dynamic landscape, acting with strategic vision and global responsibility is key to protecting the business fabric and actively contributing to the sustainable economic development of the economies where we operate.