4 ms·

A look at some of the creative ways companies try to dodge high tariffs

16 points by taubek 2y ago

magicalhippo 2y ago
Here in Norway we have the infamous "E6 ham", named after the European route[1] the trucks drive through Sweden and into Norway. The trick used there is exploiting that if you export something to have it undergo modifications abroad and then subsequently re-import it, the import rules are different and you typically do not pay the normal tariffs. Now, in Norway we don't have a lot of tariffs in general, but we do have some significant ones on food and such, including cured hams, to protect local producers. So, someone clever figured out how to exploit this. Buy a suitable pig carcass in Spain, transport it to Norway and import it as a whole pig carcass which has a low tariff, then have the trucks do a U-turn right across the border and drive back to Spain, unopened. Only fresh fish have export tariffs here in Norway, so nothing to pay there. Back in Spain you have the pig get processed into your Serrano or Iberico cured ham[2], and then transport it back to Norway. When it comes back you point to the original import declaration and claim the cured ham is a modified pig, and thus not pay the tariff for cured hams. [1]: https://en.wikipedia.org/wiki/Jam%C3%B3n https://en.wikipedia.org/wiki/Jam%C3%B3n [2]: https://en.wikipedia.org/wiki/European_route_E6 https://en.wikipedia.org/wiki/European_route_E6
- peterlada 2y ago
  Triple the transportation carbon footprint. <sarcasm> Brilliant! </s>
  - magicalhippo 2y ago
    Thankfully it's just a ~1800 mile drive each way.
- deleted 2y ago
  [deleted]
- gamblor956 2y ago
  The customs officials would call that customs fraud... Ham and other processed foodstuffs are not merely "modified" versions of the input ingredients; they are distinct products. I think the missing part of the story is that the importers are getting away with it using the universal trade lubricant: a little bit of $$$.
  - magicalhippo 2y ago
    One would think, but apparently some EU rule that overrides[1], thanks to our EEA membership[2]. Managed to dig up the article I read back when it was posted, but I've heard from others in the business just a couple of years ago they're still doing it. edit: Oh and I realize I was having a brainfart, so "modified" should have been "processed". One of those words that can map to multiple English words. [1]: https://www.nrk.no/norge/ellevill-skinkereise-1.11613122 https://www.nrk.no/norge/ellevill-skinkereise-1.11613122 [2]: https://en.wikipedia.org/wiki/European_Economic_Area https://en.wikipedia.org/wiki/European_Economic_Area
    - gamblor956 2y ago
      Ah that's a very different thing from your original comment. It's not a raw carcass being brought into Norway; it's ham. (Yes, this distinction matters. Ham is pork which has already been salted.) Sending ham back to Spain for further curing and mechanical processing would just be considered processing under EU customs rules since it gets sent out as ham...and comes back as ham.
      - magicalhippo 2y ago
        Fair point, I went off what I was told from someone on the inside a decade or so ago, and I distinctly recall them referring to importing a pig and not ham. Then I recalled the article I had read some years later and managed to dig it up. Still, a creative trick to avoid tariffs, if wasteful.
hayst4ck 2y ago
> Lobbying for exemptions Tariffs right now exist to as a way to favor particular businesses and choose winners and losers. Authoritarians reward loyalty and punish dissent. Under authoritarian regimes law is not a limit but a tool or a means. These tariff's exist to cause chaos which causes wealth centralization, but they also exist to reward loyal businesses and allow them to out compete any of their ethical competitors who might stand against the authoritarian.
- m463 2y ago
  Wouldn't US-based businesses be the ethical competitors? I think of schiit inc which works hard to make everything in the US, or the apple mac pro made in texas https://www.schiit.com https://www.schiit.com
  - itishappy 2y ago
    The implication is that some US companies receive preferential treatment on political grounds vs other US companies, not vs external ones: > A 2024 study found companies that made substantial investments in connections to Republicans before and during the first Trump administration were more likely to secure tariff exemptions, while the reverse was true of those who contributed to Democrats.

16 points by taubek 2y ago

Here in Norway we have the infamous "E6 ham", named after the European route[1] the trucks drive through Sweden and into Norway. The trick used there is exploiting that if you export something to have it undergo modifications abroad and then subsequently re-import it, the import rules are different and you typically do not pay the normal tariffs. Now, in Norway we don't have a lot of tariffs in general, but we do have some significant ones on food and such, including cured hams, to protect local producers. So, someone clever figured out how to exploit this. Buy a suitable pig carcass in Spain, transport it to Norway and import it as a whole pig carcass which has a low tariff, then have the trucks do a U-turn right across the border and drive back to Spain, unopened. Only fresh fish have export tariffs here in Norway, so nothing to pay there. Back in Spain you have the pig get processed into your Serrano or Iberico cured ham[2], and then transport it back to Norway. When it comes back you point to the original import declaration and claim the cured ham is a modified pig, and thus not pay the tariff for cured hams. [1]: https://en.wikipedia.org/wiki/Jam%C3%B3n https://en.wikipedia.org/wiki/Jam%C3%B3n [2]: https://en.wikipedia.org/wiki/European_route_E6 https://en.wikipedia.org/wiki/European_route_E6

peterlada 2y ago
Triple the transportation carbon footprint. <sarcasm> Brilliant! </s>
- magicalhippo 2y ago
  Thankfully it's just a ~1800 mile drive each way.
deleted 2y ago
[deleted]
gamblor956 2y ago
The customs officials would call that customs fraud... Ham and other processed foodstuffs are not merely "modified" versions of the input ingredients; they are distinct products. I think the missing part of the story is that the importers are getting away with it using the universal trade lubricant: a little bit of $$$.
- magicalhippo 2y ago
  One would think, but apparently some EU rule that overrides[1], thanks to our EEA membership[2]. Managed to dig up the article I read back when it was posted, but I've heard from others in the business just a couple of years ago they're still doing it. edit: Oh and I realize I was having a brainfart, so "modified" should have been "processed". One of those words that can map to multiple English words. [1]: https://www.nrk.no/norge/ellevill-skinkereise-1.11613122 https://www.nrk.no/norge/ellevill-skinkereise-1.11613122 [2]: https://en.wikipedia.org/wiki/European_Economic_Area https://en.wikipedia.org/wiki/European_Economic_Area
  - gamblor956 2y ago
    Ah that's a very different thing from your original comment. It's not a raw carcass being brought into Norway; it's ham. (Yes, this distinction matters. Ham is pork which has already been salted.) Sending ham back to Spain for further curing and mechanical processing would just be considered processing under EU customs rules since it gets sent out as ham...and comes back as ham.
    - magicalhippo 2y ago
      Fair point, I went off what I was told from someone on the inside a decade or so ago, and I distinctly recall them referring to importing a pig and not ham. Then I recalled the article I had read some years later and managed to dig it up. Still, a creative trick to avoid tariffs, if wasteful.

hayst4ck 2y ago

> Lobbying for exemptions Tariffs right now exist to as a way to favor particular businesses and choose winners and losers. Authoritarians reward loyalty and punish dissent. Under authoritarian regimes law is not a limit but a tool or a means. These tariff's exist to cause chaos which causes wealth centralization, but they also exist to reward loyal businesses and allow them to out compete any of their ethical competitors who might stand against the authoritarian.

m463 2y ago
Wouldn't US-based businesses be the ethical competitors? I think of schiit inc which works hard to make everything in the US, or the apple mac pro made in texas https://www.schiit.com https://www.schiit.com
- itishappy 2y ago
  The implication is that some US companies receive preferential treatment on political grounds vs other US companies, not vs external ones: > A 2024 study found companies that made substantial investments in connections to Republicans before and during the first Trump administration were more likely to secure tariff exemptions, while the reverse was true of those who contributed to Democrats.