If this pattern holds (high tariffs on China, low tariffs everywhere else) there will be a booming industry of pass-through "factories" that receive shipments from China and then re-sell them as having come from Vietnam or some other intermediary country.
This exact thing happens frequently at scale. When countries put export controls in place on shipments to Russia recently, they had a sudden spike in exports to a number of countries known to re-ship products into Russia.
I bought ocean fish roe from my local Euro store. “Product of Belarus” which is of course landlocked.
I thought it was highly suspicious when I noticed, like evasion of sanctions on Russia. However, food products aren’t covered by sanctions in Canada and apparently, the Belarus packaging is to make it easier to sell German fish in Russia!
I still wouldn’t want to buy food that is packaged with the intent to trick people, even if the tricksters were German. (I think Germany is a pretty trustworthy and transparent country but that doesn’t apply to every single individual there).
China has already been transshipping saying they assemble in vietnam with the only thing being done is stuff like taking labels that say made in china off the products.
Vietnam does not care as long as vietnamese people are getting paid something.
Does the US Customs office have inspectors that go to Vietnamese factories and check that the factory exists, and that 51% of the assembly was actually performed there?
If not, what stops a Vietnamese shell company from sending "Vietnamese" goods through a port in China, or worst case, a port in Vietnam?
You need a few people in a "living room" to put "made in Vietnam" stickers on things. That makes the living room a factory and so you are not legally tricking anyone even though your only part in the process is putting that sticker on.
Reminds me of the old rumor that the city of Usa, Japan exists so they can print "Made in Usa" on exports. They actually don't do that and Usa has held its name longer than the actual United Stats has existed but it still makes for a good story.
Who is incentivized in this system to say that this product is actually coming from China? Is it the US government regulators who just lost their jobs? Or the Businesses themselves who don't want to pay higher tariffs? Is it China who avoids the tariff? Is it Vietnam who just got paid for doing nothing?
The answer would typically be that the US gov't would monitor this. But that is not a muscle this administration is capable of. That would require nuance and strategy, and it's very clear from this move that this administration doesn't have that capability.
“The people who care don't know, and the people who know don't care.” The Lord of War, describing military corruption in the aftermath of the fall of the USSR.
I feel like people need to understand how they are impacting the path of least resistance when they make a change. Your change is only successful if the path of least resistance must now go where you want it to go.
if tariffs are applied based on the date of departure and not the date of arrival you can definitely get away with falsifying the date. And on the off-chance you get caught you feign confusion on account of the rapidly fluctuating circumstances and the customs guy lets you just pay whatever you owe without sanction because he has a million other people saying the same thing and even if he can tell you're lying he really doesn't care anyways.
I have a friend who had to get something shipped from Australia to Germany via freight, he told me intercontinental freight shipping generally takes multiple months if you aren't Wal-Mart/Amazon and you aren't willing to pay out the ass for express handling.
>The foreign factory system is already in place for those that use it
ah but there's the small kernel of genius within the corncob that is trump's insanity: which foreign factories do you use and who will they take the shipment from and and wait fuck he just gave a 90-day extension less than a week in, will the factory let me have my money back if i cancel?
Thinking of tariffs as a _sales_ tax, while it seems to be quite popular on this 'ere orange website, is both incorrect and very dangerous. Sales taxes, generally, are paid by the final consumer. Tariffs are paid at point of importation. This makes a big difference; if your factory makes, say, computers, sales tax impacts the (consumer) cost of the computer, but tariffs impact the cost of _all of your imported components_.
I'm only "celebrating" congress getting more time to reel this chaos in. Hopefully we have 20 pissed off enough GOP senators to realize that they never should have let Trump singlehandedly start yet another tarriff war.
It's not like people stopped being mad or are calling this good. Starting with a big number and dropping lower (temporarily!) was not a good negotiating strategy here.
