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Are Chinese Producers Successfully Evading US Tariffs?

by Richard A Reagan

If President Trump’s tariffs on all Chinese imports go into full effect, the average American family is expected to pay over $2,000 per year due to higher prices on the goods they buy. But they’ll only pay that if the imports from China are actually assessed tariffs. Goods coming in from most other countries aren’t subject to tariffs, which is good for companies in those countries. And it may be providing a means by which Chinese producers are evading the new tariffs.

While imports from China have decreased tremendously since the tariffs were introduced, imports from other countries such as Vietnam and Mexico have increased significantly. There is a great deal of speculation that Chinese exporters are sending their goods to third party countries such as Vietnam and Mexico and then fitting them with fake “Made in Vietnam” or “Made in Mexico” labeling, falsifying cargo manifests, and slipping them into the US by concealing their Chinese origins.

Doing that would benefit Chinese producers, since they wouldn’t face decreased sales due to higher prices on their goods. And it would benefit American consumers, since they wouldn’t have to pay higher prices on the goods they have come to enjoy. But it brings into question how effective Trump’s tariff policy is if it can be so easily evaded, and whether or not there is anything Trump can do about it to ensure Chinese compliance.

This isn’t the first time that China has been accused of doing something like this, as allegations of Chinese goods bearing fake “Made in Taiwan” or “Made in Hong Kong” labels have circulated in the past. The Trump administration had to have known that China would likely engage in such behavior. So with the Chinese cheating to get around US tariffs, and US producers unable to get around Chinese tariffs, what exactly is the US getting with Trump’s tough talk?

Our producers are hurt, Chinese producers aren’t, and we have a worsening trade war that will continue to hurt us more than the Chinese. Who benefits from that? Wouldn’t it be better just to call off the trade war and try to beat the Chinese at their own game? Let’s hope that some common sense and sanity prevails eventually before things get too out of hand.

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