The Trump White House reported that countries are routing their exports through third countries to avoid US tariffs, resulting in estimated tax revenue losses of $19 billion to $26 billion annually.
Tariff Evasion Methods
According to the report, China responded to new tariffs in 2018 by sending goods to other nations for packaging and limited assembly, a practice known as transshipping. This allowed Beijing to continue growing its manufacturing sector while avoiding US tariffs.
White House trade adviser Peter Navarro stated that China is laundering its exports through over 40 countries, and that other nations, such as India, could also engage in transshipping to avoid tariffs.
The Trump administration has levied high tariffs on many countries in an effort to protect US manufacturers, but these tariffs have also created new inflationary pressures at home.
To address the challenge, US Customs and Border Protection has started using artificial intelligence in a prototype program to stop transshipments. When an importer is found to have falsified the origins of a good, its imports can be retroactively tariffed.
Original reporting: 40/29 / KHBS (NW Arkansas) — read the source article.
