3 ms·

Surely all that is going to happen is that the Chinese exporters set up intermediary companies in countries within the US's 10% import tariff band and then just

by rcarr 1y ago

Surely all that is going to happen is that the Chinese exporters set up intermediary companies in countries within the US's 10% import tariff band and then just re-export their goods from there? And then just rotate countries if Trump slaps a bigger tariff on those countries? Feels like they could keep this going pretty easily until Trump leaves office. Or is there something in place to prevent this?

mindslight 1y ago
It feels far more efficient for Chinese exporters to set up intermediary companies / warehouses in the US (which many already have, for the most part), call the value of their physical products something like 10% of the retail value (leaving out the cost of consumer sales, marketing, customer service, warranty replacements, imaginary property, etc), pay the tariffs on that 10%, and call it a day. The US is pathologically friendly to foreign investment and I doubt Trump is going to be taking aim at that (lol).
- rcarr 1y ago
  Surely there's got to be some kind of law surrounding the import price and the expected final retail price? In theory you could import a car, mark it as being valued at 1 cent, pay a 200 percent tariff of two whole cents and then sell at full price. The only danger would be that something happened in transit and the insurance company only pays 1 cent. Surely there's got to be something in place to stop this kind of loophole, seems way too exploitable.
  - mindslight 1y ago
    You're taking it to the extreme whereas a 10% cost basis of a physical good sold to consumers isn't really that far off. If Dewalt claims one of their tools is worth "$200", yet it regularly sells for $100 still with enough margin for domestic distribution, "free shipping", no fault returns, branding/engineering cost of their domestic employees, etc, how much do you think they actually pay the Chinese factory? That's going to be the number written on a cargo manifest even without any shenanigans.

by rcarr 1y ago

mindslight 1y ago

It feels far more efficient for Chinese exporters to set up intermediary companies / warehouses in the US (which many already have, for the most part), call the value of their physical products something like 10% of the retail value (leaving out the cost of consumer sales, marketing, customer service, warranty replacements, imaginary property, etc), pay the tariffs on that 10%, and call it a day. The US is pathologically friendly to foreign investment and I doubt Trump is going to be taking aim at that (lol).

rcarr 1y ago
Surely there's got to be some kind of law surrounding the import price and the expected final retail price? In theory you could import a car, mark it as being valued at 1 cent, pay a 200 percent tariff of two whole cents and then sell at full price. The only danger would be that something happened in transit and the insurance company only pays 1 cent. Surely there's got to be something in place to stop this kind of loophole, seems way too exploitable.
- mindslight 1y ago
  You're taking it to the extreme whereas a 10% cost basis of a physical good sold to consumers isn't really that far off. If Dewalt claims one of their tools is worth "$200", yet it regularly sells for $100 still with enough margin for domestic distribution, "free shipping", no fault returns, branding/engineering cost of their domestic employees, etc, how much do you think they actually pay the Chinese factory? That's going to be the number written on a cargo manifest even without any shenanigans.