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Imo, this article is clickbait. Calling out Mexico but ignoring Vietnam is kinda dumb, especially because tariff evasion by labeling Chinese goods as Vietnames
by alephnerd 2y ago
Imo, this article is clickbait.
Calling out Mexico but ignoring Vietnam is kinda dumb, especially because tariff evasion by labeling Chinese goods as Vietnamese is way more common than the Mexican route because of the China-ASEAN FTA.
Secondly, Mexico has re-instated tariffs reaching 50% on Chinese goods recently, so it's not a scalable route [0][1]
Furthermore, Section 321 only applies to small goods (ie. The kinds of FMCGs you find on Temu or Shien) which were never on the radar for tariffs because there's no point [2], and you can't de minimis your way into building a car or steel.
In addition, I also think this article is ignoring the larger goal of tariffs - indirect costs like co-mingling and building new supply chains to minimize tariffs are expensive, and drastically reduce margins. Subsidizes only go so far, and at some point it's just burning money.
[0] - https://www.whitecase.com/insight-alert/mexico-reinstates-tariff-hikes-ranging-5-50-over-544-goods https://www.whitecase.com/insight-alert/mexico-reinstates-ta...
[1] - https://www.bloomberg.com/news/articles/2024-04-30/mexico-tariffs-on-steel-plastics-to-affect-7-of-total-imports https://www.bloomberg.com/news/articles/2024-04-30/mexico-ta...
[2] - https://www.barrons.com/articles/shein-temu-china-tariffs-26e1afc4 https://www.barrons.com/articles/shein-temu-china-tariffs-26...
- Miltonfried-man 2y agoThe goods go into a "bonded" warehouse, as the article says. So actually they do not pay tariffs in Mexico. "Furthermore, Section 321 only applies to small goods (ie. The kinds of FMCGs you find on Temu or Shien) which were never on the radar for tariffs because there's no point [2], and you can't de minimis your way into building a car or steel." Small goods are worth a lot of money in aggregate. Hope that helps.