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You have to pay customs duties when you import goods. Compliance with this is very high. Technically, when you buy a product out of state you are expected to p
by gamblor956 6y ago
You have to pay customs duties when you import goods. Compliance with this is very high.
Technically, when you buy a product out of state you are expected to pay use tax when you come home. Compliance with this is very low.
So, for a business, there is no arbitrage opportunity.
- kube-system 6y agoWhat duties would Walmart be paying that Apple wouldn’t?
- mastax 6y agoBased on my extensive 5 minutes of googling... There are many methods used to evaluate the value of goods used to determine customs duties. There are rules around which methods you are allowed to use. Presumably Apple is able to pay duties on the cost they pay to Foxconn which is substantially lower than the retail price. If Walmart had to instead pay duties on their actual cost i.e. US retail, that would be substantially higher. It appears that some methods (Transaction Value Of Identical Goods, Transaction Value Of Similar Goods, Computed Method Of Valuation) could allow Walmart to pay lower duties than their cost of goods, but I'm not a customs attorney so I don't know if they are applicable.
- rebuilder 6y agoThey would pay the same duties, which is why there wouldn't be an arbitrage opportunity