Articles Posted in Tariff evasion

According to an investigative report in the Wall Street Journal, the heavy tariffs imposed on Chinese goods has resulted in a large increase in tariff evasion schemes by Chinese companies seeking to sell their goods here.  Customs officials, importers and shipping brokers say that the tariff increases are being countered by unscrupulous Chinese manufacturers who are fraudulently shipping products here under false manufacturers codes and through trans-shipping and falsifying the actual country of origin, according to the Wall Street Journal. The result is that the tariffs are failing to protect. The tariff evasion using fraudulent product codes relates to 10-digit designation called an HTS code, of which there are 18,927. These codes are required to identify products and varieties. Unscrupulous manufacturers seeking to evade our tariffs send the products in with codes which designate products which are not on the tariff list.https://www.wsj.com/articles/the-u-s-china-trade-battle-spawns-a-new-era-of-tariff-dodges-1539009200?mod=hp_lead_pos5
One indicator of the misclassification increase is that there were 146 rulings in July, nearly triple the number six months earlier and this is considered the tip of the iceberg. In one example included in the WSJ article, a wood importer in Oregon received a call from a supplier asking if he would like some Chinese plywood tariff free. The importer asked how this would happen and the response was don’t worry about it as the plywood would not contain any Chinese markings and it would be shipped under some other code.
Diamond saw blades made in China now carry  82% tariffs.  In July, two California importers controlled by a Chinese manufacturer tried to dodge the tariff by coding diamond saw blades as grindstonesaccording to Customs. The maker, Danyang Like Tools Manufacturing Co., claimed independent of the California importers but  one of them told the agency Danyang was its owner. The California firms have disputed the charges.

CBSA-300x200The impending tariffs that will be put in place by the Trump administration on aluminium and steel are already being illegally circumvented by some Canadian companies. In the hopes of stopping the smuggling of cheaper metals, the Canada Border Services Agency (CBSA) announced regulatory changes to prevent this type of crime.

Smuggling Concerns

The Prime Minister of Canada has said he was aware of concerns that countries facing the tariffs could try to ship supplies through Canada and then act as if metals had been produced in his country.