U.S. tariffs evasion tactic adopted by China unveiled
Chinese Manufacturers Unveil Clever Trick to Bypass Trump's Tariffs
In a sneaky maneuver, Chinese companies are employing a cunning strategy to bypass the tariffs imposed by U.S. President Donald Trump. This revelation comes from the Financial Times, as manufacturers resort to a tactic known as DDP – delivered duty paid.
Here's the lowdown on this sneaky scheme: Instead of charging buyers for customs clearance costs, factories in China are understating the value of goods and disguising their descriptions. This deception helps them dodge the full tariff bill.
American logistics corporations partnering with Chinese exporters have disclosed this trickery. One of them has reported the practice to U.S. Customs and Border Protection already.
You might recall that Chinese companies have previously sent their goods to the U.S. via third countries. Hiding behind fair trade facades, this method was also utilized to evade Russian sanctions. The Chinese would ship cargo to Malaysia, snag new certificates of origin there, and then seamlessly continue their journey to the U.S. [4]
It's worth mentioning that U.S. President Donald Trump announced a new tariff system for imports from 185 countries on April 2. A 10% basic tariff was slapped on all imports, with heftier rates for select countries. World leaders lambasted this move, threatening retaliatory measures. After a string of skirmishes in the trade war, U.S. tariffs on Chinese goods hit an astonishing 145%, with China's counter-tariffs on U.S. goodssmithing in at 125% [5].
Best,Zoya Oskolkova
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In Depth: DDP isn't inherently a loophole in Trump's tariffs. Instead, it's a shipping method where the seller shoulders the responsibility for customs fees and taxes, providing a hassle-free purchasing experience for customers. However, if the value of goods is significantly underreported, it could spell trouble, with inspectors from the U.S. Customs and Border Protection (CBP) likely to knock on the door, demanding payment of the correct tax or potentially grapping the goods. Therefore, while DDP can accommodate tariffs within shipping costs, it isn't a workaround for avoiding them but rather a way to legally handle the payments [2][3].
Solicitations might promise to utilize DDP to minimize cost increases due to tariffs, but watch out – these offers could involve unwanted risks if they hint at underreporting values or other shady practices [1]. Businesses must ensure that all customs declarations are accurate to dodge legal pickles.
- The revelation from the Financial Times indicates that Chinese manufacturers are utilizing the DDP method to bypass President Trump's tariffs, potentially misrepresenting the value of goods and descriptions to deceive customs inspectors.
- Chinese businesses employing the DDP method might claim to minimize cost increases due to tariffs, but these claims could be misleading if they involve underreporting the value of goods or other questionable practices, putting businesses at risk of legal complications.
