US companies hunt for loopholes to beat China tariffs

KCRW
| KCRW

Automatic TRANSCRIPT

We begin today where we often have lately the trade war the escalating tariffs between the u._s. and china perhaps you've heard that mentioned here before now yes for sure those tariffs have had an impact on trade between the two nations and during the g twenty summit that starts on friday and japan president trump and president xi jinping will meet to talk about their relationship issues but meanwhile business finds a way to go on as usual and many businesses have resorted to work arounds loopholes shall we say that helped them avoid paying these tariffs marketplace's eric embarrassed has that story work arounds on tariffs sometimes called transshipments have been around as long as terrorists have existed says emily blanchard professor at dartmouth but right now they're having a moment when tariffs were lower before this trade war it wasn't a profitable strategy now that tariffs are going up we would definitely expect to see transshipment becoming more popular and not all transshipments are created equal practices like shipping furniture made in china to a third country with lower tariffs like vietnam and then removing the made in china sticker that's a legal but doing most of the production in china and the finishing touches elsewhere that's arguably legal says michael moore who teaches economics and international affairs at george washington university if you bring the product in and you use a screwdriver to screw in the last screw that doesn't mean it's made in vietnam it has to be a substantive change in the product like assembly new kind of paint or a crucial part since the beginning of the trade war a lot of goods made in china have been shipped from sapient nam or other southeast asian countries entering the u._s. via transshipments mary lovely and a communist and fellow at the peterson institute says industries like footwear toys and steal can use transshipment but others can't like industries that have to be certified so called life and death industries artificial knees any kind of medical products that are made in china those that whole supply chain is certified by u._s. regulators you can't all of a sudden just say oh i happen to get any from someplace else that leaves those industries with no option but to pay those terrorists or move their production elsewhere altogether america bears from

Coming up next