CDZ Can Chinese Avoid Tariff by Rerouting their products through a third country?

[grbb]

Things that are easy to cheat unless you do it big sounds a bit hazy for me.

Are you a libertarian? I am a moderate one.

 

[OldLady]

That "third" party can be a puppet company.

I think you've got an idea that deserves a patent.

 

[grbb]

That "third" party can be a puppet company.

I think you've got an idea that deserves a patent.

It's not a very unusual ideas. The rules are not clear. Many corporations are made to avoid income taxes. Tariffs sound a lot like something easily avoidable.

 

[evenflow1969]

That "third" party can be a puppet company.

I think you've got an idea that deserves a patent.

It's not a very unusual ideas. The rules are not clear. Many corporations are made to avoid income taxes. Tariffs sound a lot like something easily avoidable.

North Korea and Iran have gotten around them to some extent for a veryt long time. They will cheat, then we catch them. They change the scam rinse and repeat. Tarriffs are a form of punishment they are never good while on the books. All they do is cause mutual pain. If they cuase enough pain to get china to quit minipulting currency and stealing tech they may be worth it. Unlikely in this case as they were not well thought out and did not bring into the fold enough other nations to make a dent. Some thing had to be done, the question is what. For decades I have listened to republicans and dems alike complain about chinas actions. Maybe it is about time both sides of the isle work on this issue and do some thing real about it.

 

[Dan Stubbs]

A chinaman is producing porcelain, paper, and gun powda.

I am making this up here. Just for sample.

Donald Trump is like, 1000% tariff on all porcelain from China.

Mr. Ching Chong then sell porcelain to Harambe in Mexico, that then sell it to Jim Smith in Texas.

Problem solved.

0% Tariff.

If anything, the only thing Donald Trump did is giving money to traders.

They have been doing that for years. Japan was shipping gold to the US and then shipping it back to Japan to offset the trade deficit

 

[Syriusly]

A chinaman is producing porcelain, paper, and gun powda.

I am making this up here. Just for sample.

Donald Trump is like, 1000% tariff on all porcelain from China.

Mr. Ching Chong then sell porcelain to Harambe in Mexico, that then sell it to Jim Smith in Texas.

Problem solved.

0% Tariff.

If anything, the only thing Donald Trump did is giving money to traders.

As much as I despise Trump's idiotic Trade Wars- you frankly don't know how things work.

In order to be eligible for NAFTA- the new one or the old one- the product has to meet the eligibility requirements- and that means generally made in Mexico.

Now you say but they could lie. Certainly that is possible- but the shipper in Mexico has to certify that the product was made in Mexico and has to be able to prove that to U.S. Customs.

And Customs goes and visits factories in Mexico.

What you are suggesting is one of the oldest scams in the books and Customs watches specifically for that kind of crap.

Oh and if you are a U.S. importer who knowingly participates in such a scheme, you can go to prison.

 

[Syriusly]

A chinaman is producing porcelain, paper, and gun powda.

I am making this up here. Just for sample.

Donald Trump is like, 1000% tariff on all porcelain from China.

Mr. Ching Chong then sell porcelain to Harambe in Mexico, that then sell it to Jim Smith in Texas.

Problem solved.

0% Tariff.

If anything, the only thing Donald Trump did is giving money to traders.

What will happen though is that stuff produced in countries we target will sell their goods to other markets.

They can sell it to Jacques in France. They make it for $30 and sell it to Jacques in France. Jacques pays $50 for a widget. He sells it for $90.
They can sell it to Jack in Florida. They make it for $30 and sells it to Jack in Florida. Jack pays $60 for the same widget. He sells it For $105.

This guy is right.

They'll be small cases of it for sure but to ship something through a third party to avoid a tariff is asking for a lot of efficiency on the third party's part. Not to mention a bunch of idiocracy on the importer's part.

.....although you know, we have a habit of letting companies import illegal aliens for their financial benefit to the detriment of Uncle Sam.

A chinaman is producing porcelain, paper, and gun powda.

I am making this up here. Just for sample.

Donald Trump is like, 1000% tariff on all porcelain from China.

Mr. Ching Chong then sell porcelain to Harambe in Mexico, that then sell it to Jim Smith in Texas.

Problem solved.

0% Tariff.

If anything, the only thing Donald Trump did is giving money to traders.

It likely isn't that easy. What will happen though is that stuff produced in countries we target will sell their goods to other markets.

They can sell it to Jacques in France. They make it for $30 and sell it to Jacques in France. Jacques pays $50 for a widget. He sells it for $90.
They can sell it to Jack in Florida. They make it for $30 and sells it to Jack in Florida. Jack pays $60 for the same widget. He sells it For $105.

This guy is right.

They'll be small cases of it for sure but to ship something through a third party to avoid a tariff is asking for a lot of efficiency on the third party's part. Not to mention a bunch of idiocracy on the importer's part.

.....although you know, we have a habit of letting companies import illegal aliens for their financial benefit to the detriment of Uncle Sam.

Many large US importers will see minimum impacts of larger tariffs by order shifting which is completely legal.

For example, a large textile company with plants in in a number of countries with very low labor costs and very low import tariffs including China India, Turkey, and Pakistan shifts orders between plants as needed. Now the US puts a larger tariff on goods from China. The distributor then switches orders. Pushing orders bound for the US to India, Pakistan, and Turkey. Orders normally routed to these countries are routed to China. All plants are getting the same amount of work and the Trump tariffs are having little if any effect. This is just one of many ways of bypassing or reducing tariffs.

Unfortunately small importers do not have that option and they are the ones that get hurt the most.

Textile companies don't generally make much in China. And frankly they generally don't make the same product in multiple factories around the world. Not to say it doesn't happen, but it is unusual. For instance say Levi's- might make something in Egypt using special tariff programs- they don't make the same product also in Pakistan because there are specific advantages to making it in Egypt.

The problem with Trump's sledge hammer approach is that it normally takes years to set up a manufacturing operation in another country. Yes this will lead to shifting a lot of production out of China- but it will take years to move it to Vietnam or Thailand or wherever.

I sat in on meetings discussing exactly this- large importers- large retailers- are going to get hit hard- and they will be passing on these tariffs directly to consumers.

 

[Syriusly]

That "third" party can be a puppet company.

I think you've got an idea that deserves a patent.

It's not a very unusual ideas. The rules are not clear. Many corporations are made to avoid income taxes. Tariffs sound a lot like something easily avoidable.

Actually tariffs are not easily avoidable.

Everything you have suggested has been considered by U.S. Customs before- and been seen by them before. There are all sorts of algorithms in place looking for just those kinds of frauds.

U.S. Customs officials are gun carrying law enforcement- and people can and do get arrested for commiting fraud against the United States.

Yes- it does happen- but the major corporations in the United States all have compliance departments in place to ensure that their companies don't break the laws.

And understand- these tariffs are huge- affecting right now some 70-80% of product imported into the United States from China- any kind of widespread abuse like you are suggesting would be entirely obvious.

I am not against confronting China for its own trade policies- but these tariffs are using a sledge hammer to swat flies in a glass shop.

As Flopper so well put- they help no one but the governments that collect the taxes....er tariffs....

 

[HereWeGoAgain]

A chinaman is producing porcelain, paper, and gun powda.

I am making this up here. Just for sample.

Donald Trump is like, 1000% tariff on all porcelain from China.

Mr. Ching Chong then sell porcelain to Harambe in Mexico, that then sell it to Jim Smith in Texas.

Problem solved.

0% Tariff.

If anything, the only thing Donald Trump did is giving money to traders.

At what cost to the chinaman?
Harambe ain't gonna do that shit for free.

 

[Dekster]

Labor is such in insignificant input into the cost of manufacturing and delivering consumer goods, it really won't matter that much to bother shipping through straw countries. The tariffs in time will encourage more domestic job creation.