SALES, RENTALS & LAYAWAYS

PROTECTING EVERYTHING THAT HAS EVER BEEN OF VALUE TO YOU

Open 24/7/365

We Have A Life-Time Warranty /
Guarantee On All Products. (Includes Parts And Labor)

Companies Dodge Trump Tariffs On China By Rerouting Goods (#GotBitcoin?)

Data from Vietnam show surges in both imports from China and exports to the U.S., highlighting how transshipment circumvents levies. Companies Dodge Trump Tariffs On China By Rerouting Goods (#GotBitcoin?)

Companies Dodge Trump Tariffs On China By Rerouting Goods (#GotBitcoin?)

Billions of dollars worth of China-made goods subject to tariffs by the Trump administration in its trade fight with Beijing are dodging the China levies by entering the U.S. via other countries in Asia, especially Vietnam, according to trade data and overseas officials.

The Trump administration has for more than a year sought to weed out the practice known as transshipment, in which Chinese exports typically are minimally processed or altered during a brief stop in a third port and then re-exported as a product originating from the third port. Such circumvention threatens to crimp U.S. plans as it prepares to add tariffs on to $300 billion of Chinese exports, from toys to electronics, essentially covering all its China trade. The U.S. already has placed 25% tariffs on some $200 billion of Chinese exports.

In the first five months this year, exports to Vietnam from China of electronics, computers, and machinery and other equipment have sharply increased compared with a year earlier. In turn, so have exports of such goods from Vietnam to the U.S., Vietnamese trade data show.

“The phenomenon of trade fraud through labeling of the origin of goods as being produced in Vietnam is increasing,” the Vietnamese Ministry of Industry and Trade said. “Such fraudulent labeling not only directly affects products and consumers, but also significantly reduces the reputation and competitiveness of goods manufactured in Vietnam.”

Vietnam’s customs agency said this month that it instructed its provincial and municipal branches to step up inspection and verification of certificates of origin, a document that accompanies all international shipments, according to state media. The regulator said companies, which it didn’t identify, had been importing Chinese goods, replacing the labeling to say “Made In Vietnam,” then re-exporting the goods to the U.S., Europe or Japan.

Vietnam, which abuts China’s southern fringe, last year was at the center of a Trump administration effort to curb transshipment of Chinese exports of steel and furniture via Southeast Asian countries, including Thailand and Malaysia.

A spokeswoman for U.S. Customs and Border Protection said it has identified illegal transshipment of Chinese goods through several countries, pointing to cases in recent months in Vietnam, Malaysia, and the Philippines. She said the agency will continue to pursue such evasion.

Washington’s campaign in recent years included slapping punitive duties, in addition to the broad tariffs, on Chinese-origin goods from steel to furniture that the U.S. Commerce Department deemed to have been transshipped. It is unclear how far the measures succeeded in curbing the trading malpractice. Recent trade data from Vietnam and Taiwan, and official statements from Cambodia, indicate the problem still exists.

Outside Asia, nations such as Serbia and Mexico also play these middleman roles, shippers say. But U.S. officials and industry analysts say Vietnam has for years played a pivotal role in importing Chinese steel, lightly treating it, and then re-exporting the product as a Vietnamese good—thereby giving Chinese steelmakers and Vietnamese processors a means to end run the U.S. tariffs.

In May 2018, the U.S. imposed duties of more than 250% on certain Vietnam steel exports after finding they contained “a significant portion” of Chinese steel. The ruling hinged on the Commerce Department’s conclusion that the costs for steelmakers in Vietnam to increase the product’s value with additional processing and coatings were “minor and insignificant.”

U.S. officials are stepping up enforcement against companies re-exporting Chinese goods via the Chinese-owned Sihanoukville Special Economic Zone in Cambodia, accusing unidentified firms of transshipment, the U.S. Embassy in Phnom Penh said. Companies in the zone make and trade products including garments, bags and leather goods.

“The Department of Homeland Security has investigated and fined a number of companies for evading tariffs in the U.S. by routing goods through Cambodia,” Emily Zeeberg, a media official for the embassy, said in an email this week.

Vietnam, which has benefited from the trade dispute between the U.S. and China, is vulnerable to losing some of its newfound business if the country is perceived as a transshipment center. It is primed to benefit from a reordering of the global supply chain. Many companies, including Apple Inc. supplier Foxconn Technology Group and electronics giant Sharp Corp. are weighing plans to migrate manufacturing capacity out of China to hedge against the cost of the U.S.-China trade fight.

President Trump said Wednesday that many companies are moving to Vietnam, but that “Vietnam takes advantage of us even worse than China.” In the interview with Fox Business Network, Mr. Trump called Vietnam an abuser and said the U.S. is in discussions with the Asian nation.

The reshaping of global supply chains, particularly in tech, is set to continue even if President Trump and his Chinese counterpart Xi Jinping make headway on any kind of trade deal at the G-20 meeting this week. Such physical relocation is in its infancy, analysts say, and it is too soon to influence the sharp swings already evident in the trade data, which U.S. and Asian government officials say is more likely due to transshipment.

Vietnam’s exports of computers and electronics to the U.S. increased 71.6% in the first five months this year to $1.8 billion, more than five times the pace of its exports of such products world-wide. In the same period, its imports from China in this category rose 80.8% to $5.1 billion, four times the pace of its world-wide figure, the data show.

In the January-May period, exports to the U.S. of machinery and equipment from the Southeast Asian nation rose 54.4% year-over-year to $1.7 billion, compared with a 6.7% rise globally, Vietnam data show. Imports from China in the same time frame rose 29.2% to $5.7 billion, around twice the pace posted for world-wide imports.

The practice of transshipment is widespread enough that it has spawned port infrastructure to support it, trade professionals say.

“Many buildings called factories are set up in Vietnam which are really storage structures to hold goods being sent here, but are really made in China,” said Jeffrey Newman, founder of Jeffrey Newman Law, a Boston-based firm that handles tariff-evasion cases.

Vietnam customs officials didn’t immediately respond to a request for comment.

Trade trends in Taiwan, a major tech exporter, also have drawn attention. The island’s exports to the U.S. of servers, switches, routers and other computer gear rose 56.3% to $4.3 billion in the January-April period, nearly three times the broad export growth to the U.S. of 20%.

Taiwan’s economic ministry said this month that it is monitoring for signs of transshipment, but attributed the increase to strengthening U.S. demand and increased Taiwanese investment.

Updated: 12-16-2019

Trump’s ‘America First’ Trade Vision Comes Into Focus on Three Fronts

President’s tactics break with predecessors’ to extract concessions, but issues with China remain unresolved.

President Trump claimed a multi-front victory last week in his bid to reshape U.S. trade policy, extracting fresh commercial concessions from Mexico and China while stripping the World Trade Organization of its powers to restrain the tactics he used to secure them.

Combined, the efforts show an approach toward U.S. trading partners and multinationals that is focused more on pressuring companies to produce domestically and sell American-made goods abroad than on helping them expand their global manufacturing footprint.

On Tuesday, the White House announced the rewrite of the country’s largest trade deal, the 1994 North American Free Trade Agreement, winning approval not only from the compact’s Mexican and Canadian partners but from longtime Nafta opponents among congressional Democrats and organized labor. On Friday, the administration brokered a truce with Beijing in its year-and-a-half-long trade war, putting further tariffs on hold and securing an unusual Chinese pledge to boost imports of U.S. goods by a specified dollar amount while trade talks between the two sides continue.

In between those two announcements, the U.S. on Wednesday effectively crippled the Geneva-based WTO trade courtthat was launched in 1995 to prevent the kinds of trade tactics Mr. Trump has deployed to coerce America’s trading partners to the bargaining table. Over the past two years, the administration has blocked the appointment of judges to the court and, after two remaining members’ terms expired, the panel as of last week no longer had enough members to issue decisions and enforce WTO rules.

Many economists, business leaders and members of Congress from both parties say Mr. Trump’s efforts have done little so far to boost economic activity—other than by defusing the uncertainty he himself stoked with his disruptive acts. But many also agree that “this was the week where the first three years of Trump administration trade policy all came together,” said Clete Willems, who worked as a White House trade adviser until April.

Mr. Trump’s administration will now turn to negotiating the next phase of a deal with China—though election-year politics and Chinese resistance might make such an agreement difficult—and to reaching new or expanded pacts with other trading partners, including Japan and the European Union. A new agreement with the U.K. is also a priority, after the election victory last week of Prime Minister Boris Johnson’s Conservative Party made a British departure from the EU almost certain.

Mr. Trump took office in January 2017 wanting to upend the longstanding U.S. approach to trade. His predecessors, he has said repeatedly, negotiated bad agreements, and he vowed to rip them up. He wanted to focus more on concrete outcomes—cutting the trade deficit, boosting U.S. manufacturing—than on bolstering transparent, market-opening rules. He believed previous presidents had been too responsive to multinational companies, too deferential to multilateral institutions and too timid about wielding American power unilaterally.

The public details of the “phase-one” China deal were vague, with many disputed issues left to later negotiations, but one provision the U.S. announced was what it characterized as a promise by Beijing to boost imports of U.S. goods and services over the next two years by at least $200 billion over 2017 levels—roughly a doubling within four years that many analysts consider unlikely.

Beyond the top-line number, “We have a list that will go: manufacturing, agriculture, services energy.…There’ll be a total for each one of those,” Robert Lighthizer, Mr. Trump’s chief trade negotiator, said on CBS’s “Face the Nation” Sunday. Those specific targets echo various import and export quotas that Washington imposed on Japan in the 1980s, a managed-trade approach that U.S. governments came to shun over the past 30 years.

The new Nafta—rebranded the U.S.-Mexico-Canada Agreement,or USMCA—followed 2½ years of negotiations, after which Mexico agreed to provisions designed to strengthen its workers’ labor protections. Those included measures allowing Americans to monitor conditions there in ways some Mexicans feel intrude on their sovereignty. The goal is to raise the cost of manufacturing in Mexico and shift production that had moved there under the original Nafta back to the U.S.

While that contrasts with the earlier pact’s objectives of expanding trade and raising the manufacturing efficiency of a unified continental bloc, it encapsulates “Trump trade policy,” Mr. Lighthizer said Sunday. “He doesn’t want American manufacturing workers to have to compete with people who are operating in very difficult working conditions.”

Another last-minute change in USMCA was the removal of a provision for U.S. drugmakers forcing other countries to extend their patent protections, something the pharmaceutical industry had succeeded in making standard in new trade deals. The USMCA also drops protections for American multinationals investing in other countries, another hallmark of recent U.S. trade agreements. Both changes show how Mr. Trump sees trade deals as less about helping multinationals do business abroad than encouraging them to focus production at home.

“This is the first trade agreement the U.S. has ever done that raises trade barriers and degrades investor protections,” said Daniel Price, a top trade official in the George W. Bush administration.

Skeptics saw in last week’s activity the limits of unilateral American might in bending the global trading system to its will.

“Trump was right to call China out on their violations of rules and norms,” said Fred Bergsten, a trade expert at the Peterson Institute for International Economics. “But he has been going at them for three years, unleashed a lot of firepower, and has gotten essentially nowhere on the big issues.”

He added that Mr. Trump’s disdain for multilateralism undercut his goals: “China can stand up to us one on one, but it cannot stand up to us if we maintain our alliance structure.”

Farm groups said the gains Mr. Trump touted might not even sufficiently offset their losses to date from his actions. The American Farm Bureau Federation noted Friday that “China went from the second-largest market for U.S. agricultural products to the fifth-largest since the trade war began.”

Yet to Trump supporters, “The latest deals show that the United States has a great deal of leverage, when that leverage is used effectively,” said Stephen Vaughn, who worked until April as an administration trade negotiator. “The U.S. is actively making its own trade policy right now, and that’s going very well.”

Since the WTO’s creation a quarter-century ago, U.S. presidents have avoided using those unilateral powers, instead taking their complaints to the WTO and letting the judges there determine whether the U.S. had a legitimate grievance and, if so, the proper response. Mr. Trump has regularly said the Geneva trade court treats the U.S. unfairly, arguing American interests were better served by undermining the institution. After last week’s neutering of the trade court, other countries will have a harder time using the WTO to challenge American actions.

Mr. Trump’s tactics in pursuing the USMCA and China deals marked a sharp break from his recent predecessors. He imposed tariffs unilaterally to force concessions. Mexico and Canada agreed to rewrite Nafta in part to get Mr. Trump to remove steel and aluminum tariffs he had placed on them, and to respond to Mr. Trump’s threats to add new levies on cars. The China import pledge was given in part to get Mr. Trump to drop new tariffs on $156 billion in Chinese goods scheduled to take effect Sunday.

The president’s critics cite studies showing modest gains at best for the economy—and argue that positive market response to the recent announcements reflect more relief that the administration appeared to cease disrupting the system than any celebration of substantive progress made.

“If your metric is that we’ve stopped bleeding ourselves, then these have been a plus,” said Robert Zoellick, a former chief trade negotiator in the Bush administration from 2001 to 2005. “If your metric is whether we’re expanding trade, opening markets and setting higher standards, then these have been a total waste of time.”

Despite warnings that the president’s tactics would tank markets and the economy, both have remained strong throughout his term.

“This might have been Trump’s best week in the White House,” said Stephen Moore, a fellow at the conservative Heritage Foundation and an informal adviser to the president. He noted that, in addition to the trade deals, “you had a monster jobs report” Dec. 6, when the unemployment rate matched a half-century low of 3.5% and then, by some benchmarks, “the stock market hit an all-time high.”

Companies Dodge Trump Tariffs, Companies Dodge Trump Tariffs, Companies Dodge Trump Tariffs,Companies Dodge Trump Tariffs, Companies Dodge Trump Tariffs, Companies Dodge Trump Tariffs,Companies Dodge Trump Tariffs, Companies Dodge Trump Tariffs, Companies Dodge Trump Tariffs,Companies Dodge Trump Tariffs, Companies Dodge Trump Tariffs, Companies Dodge Trump Tariffs,

 

Related Articles:

As China Tariffs Loom, Some U.S. Companies Say Buying American Isn’t An Option (#GotBitcoin?)

Trump’s Tariffs Is Killing The Middle-Class Market

Trump Tower Is Now One of NYC’s Least-Desirable Luxury Buildings

Ship Orders Fall To Lowest Level In 15 Years Indicating Trumponomics Is Not Working (#GotBitcoin?)

Why Stock-Market Volumes Are The Lowest In Months As The Dow, S&P 500 And Nasdaq Test Records (#GotBitcoin?)

Black Workers See Record-Low Unemployment In Addition To Smallest Wage Gains (#GotBitcoin?)

Trump Calls On Fed To Cut Interest Rates, Resume Bond-Buying To Stimulate Growth (#GotBitcoin?)

Fake News: A Perfectly Good Retail Sales Report (#GotBitcoin?)

Anticipating A Recession, Trump Points Fingers At Fed Chairman Powell (#GotBitcoin?)

Affordable Housing Crisis Spreads Throughout World (#GotBitcoin?) (#GotBitcoin?)

Los Angeles And Other Cities Stash Money To Prepare For A Recession (#GotBitcoin?)

Recession Is Looming, or Not. Here’s How To Know (#GotBitcoin?)

How Will Bitcoin Behave During A Recession? (#GotBitcoin?)

Many U.S. Financial Officers Think a Recession Will Hit Next Year (#GotBitcoin?)

Definite Signs of An Imminent Recession (#GotBitcoin?)

What A Recession Could Mean for Women’s Unemployment (#GotBitcoin?)

Investors Run Out of Options As Bitcoin, Stocks, Bonds, Oil Cave To Recession Fears (#GotBitcoin?)

Goldman Is Looking To Reduce “Marcus” Lending Goal On Credit (Recession) Caution (#GotBitcoin?)

Our Facebook Page

Your Questions And Comments Are Greatly Appreciated.

Monty H. & Carolyn A.

Go back

Leave a Reply

Secured By miniOrange