US Politics
Fraudsters are using ingenious hacks to pay lower tariffs on overseas products – like lying about the product inside
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Companies are finding new ways to evade President Donald Trump‘s sweeping global tariffs, according to a new report.
Several Chinese firms are helping companies find ways to bring their products to the U.S. while avoiding high tariff costs, The New York Times reports, which experts say amounts to customs fraud.
One of these tricks includes telling U.S. Customs and Border Protection that the product is worth less than it is, the Times reports. Tariffs are based on a percentage of the import price.
Another trick involves reporting that the product is made of a different material than it actually is, according to the Times. For example, a company may report that a polyester shirt is made of cotton, because the latter is subject to a lower tariff.
A company could also send a product through another country that is subject to a lower tariff first, before shipping it to the U.S.
Leslie Jordan, an apparel manufacturer, told the Times these schemes are putting “many honest companies at a competitive disadvantage.”
“People can’t afford it,” Jordan said. “They’re desperate.”
David Rashid, executive chairman of the car part company Plews, said that “those willing to cheat are going to continue to win the day” if more isn’t done to stop tariff evasion.
John Foote, a customs lawyer at Kelley Drye & Warren, told the Times that the uptick in cheating is a “sign of entering a high tariff era.”
White House spokesperson Kush Desai told the Independent that the Trump administration’s tariffs policy is aimed at addressing the “persistent trade deficits” that he said have “decimated American industry, and left American workers behind.” Desai added: “Instead of trying to find illegal workarounds to tariffs, foreign exporters would be better off telling their governments to negotiate a trade deal with the United States.”
The Trump administration has yet to officially finalize a single new trade deal.
Last month, Trump announced sweeping tariffs on nearly every country in what he called “Liberation Day” for the U.S. Soon afterward, he paused most reciprocal tariffs for 90 days, leaving only 10 percent blanket tariffs in place.
Some countries still face higher tariffs, however. Trump briefly placed a 145 percent tariff on Chinese goods before lowering the tax to 35 percent this month. In return, China lowered its tariff on U.S. goods from 125 percent to 10 percent.
The White House eased the tariffs on China after several aides warned Trump that his new levies would cause his supporters to suffer financially, according to The Washington Post.
Trump’s trade policies have left many feeling uncertain about the future. His administration has announced new or revised tariff policies more than 50 times since he took office, according to a recent tally by the Post.
