An anti-dumping duty is a tariff or tax imposed by a government on imported goods that are sold at a price lower than their fair market value, a practice known as "dumping." Dumping occurs when a company exports its products to another country at a price lower than what it charges in its domestic market or lower than the cost of production. This unfair pricing can harm domestic industries by creating an unequal playing field.

The imposition of anti-dumping duties is a measure taken by countries to protect their domestic industries from the negative effects of dumping. It aims to prevent foreign companies from flooding the market with cheap goods and undercutting local producers. Anti-dumping duties are intended to offset the unfair competitive advantage created by dumping and restore fair competition.

The process of imposing anti-dumping duties involves an investigation by the importing country's government or trade authorities. They examine the evidence of dumping, such as price undercutting and its impact on the domestic industry. If dumping is found to be occurring and causing harm to the local industry, the authorities may impose anti-dumping duties on the imported goods.

The amount of the anti-dumping duty is typically calculated based on the difference between the export price of the goods and their fair market value. This calculation is done to neutralize the price distortion caused by dumping and bring the prices of the imported goods in line with fair market value.

It's important to note that the imposition of anti-dumping duties is subject to international trade rules and agreements. The World Trade Organization (WTO) has established guidelines and procedures for investigating and imposing anti-dumping measures. These guidelines aim to ensure that anti-dumping duties are not used as a form of protectionism but are based on legitimate evidence of unfair trade practices.

Overall, anti-dumping duties are a trade policy tool used by governments to address the issue of dumping and protect domestic industries from unfair competition.