Articles Tagged with #Trade war China

trade warAccording to a report released earlier this month, U.S. companies are increasingly shifting imports from China to countries like Vietnam, South Korea, Mexico, and Taiwan, in an effort to avoid the high tariffs imposed on Chinese purchases during the current trade war.

With the current trade war waged on China, President Donald Trump has imposed tariffs of up to 25% on the purchase of Chinese products. This dramatically increases the overall costs that U.S. companies are looking to spend, causing them to search for new alternatives. According to S&P Global Market Intelligence, the number of containerized freight imported from China fell 6.4% in the first corner. In order to avoid paying the high tariffs, U.S. companies have rerouted the majority of their purchases to less expensive countries. However, many companies also chose to order mass purchases from China ahead of the tariff increases in an effort to stockpile their products.

Many of the companies choosing to reroute their imports are associated with the furniture industry, but these are not the only markets struggling to avoid tariffs. While large furniture retailers, like Home Depot and Target, decreased Chinese imports by up to 13.5%, appliance retailers like Samsung and LG were also part of a major shift in Chinese imports.

 The anticipated trade war with China appears to have actually started as severalships carrying more than $216m worth of sorghum were at sea but several changed course within hours of China’s announcement this week that it would place stiff tariffs on the grain. China said it would begin requiring deposits of 178.6% of the value of grain shipments. The diverted ships were all loaded in Texas, would have had to pay that deposit, rendering their shipments unprofitable.

US regulators focused on Chinese technology companies, banning American companies from selling products telecom equipment maker ZTE. US telecom are also be barred from buying equipment from foreign companies deemed a security risk, a move likely to hurt Chinese telecom Huawei as well as ZTE.

At the same time, there has been an increase in Chinese companies shipping to the U.S. which are finding ways to evade existing U.S. customs duties by shipping products to other nations and re-labeling them with a different country of origin, such as Vietnam or Mexico which does not have high duties on the same products including steel and sea food goods. U.S. agencies are seeking ways to try to stop this practice including allowing whistleblowers to report the fraud and collect up to 30% of what the government collects.