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Firms Transship to Avoid Tariffs



(p. B1) SHANGHAI -- Want to avoid American tariffs? In China, a company called Settle Logistics says it knows a way.

Specifically, that way goes through Malaysia -- a 4,600-mile diversion compared with sending a shipping container from China straight across the Pacific to the United States. But when those Chinese products arrive at an American port, they will look as if they had come from Malaysia, according to the company, and will be spared tariffs aimed at Chinese goods.

"For those unfair trade barriers targeting our industries from certain countries," Settle Logistics says on its website, "we can adopt other approaches to bypass those trade tariffs in order to expand markets."

Such zigzagging routes are called transshipments, and President Trump has used them to justify the trade fight he has picked with a number of countries. They could also take on new relevance should the United States and China carry out their threats to levy a total of more than $200 billion in tariffs against each other.


. . .


(p. B6) Stamping out such transshipments could prove difficult. The United States made a big effort in the late 1990s to address the relabeling in Hong Kong of garments that had been made in mainland China, said Patrick Conway, a textiles trade specialist.

But after American officials gathered enough evidence to put companies on a watch list, the companies quickly disappeared, said Mr. Conway, who is the chairman of the economics department at the University of North Carolina at Chapel Hill. Some of the same people involved emerged later, but at other companies.

"We can anticipate a game of Whac-a-Mole," Mr. Conway said.



For the full story, see:

Keith Bradsher. "Dodging Tariffs With a Handy Detour." The New York Times (Monday, April 23, 2018): B1 & B6.

(Note: ellipsis added.)

(Note: the online version of the story has the date April 22, 2018, and has the title "Tariff Dodgers Stand to Profit Off U.S.-China Trade Dispute.")






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