How do companies try to escape the high customs duties of Trump?

With the increasing concerns about the impacts of the expensive new customs duties on companies and consumers, there is also an increasing talk about how some companies try to avoid these fees, according to the American NBR platform.

Revenge measures from Trump’s fees

The taxes that US President Donald Trump threatened to impose a long time ago on imports from China, Mexico and Canada into effect on Tuesday, which led to retaliatory measures on American exports, which led to the disturbance of the stock market and the fueling of fears of an economic slowdown.
Also read: Trump customs duties threaten Asian countries other than China
On Wednesday, Trump granted auto companies a single month of customs duties, confirming the inability to predict – and the potential field of maneuver – in his commercial management policy.
On Thursday, he signed executive orders to raise customs duties on many Mexican and Canadian goods until April 2.

The extent of the fees for the fees

“I am interested in knowing the extent of customs duties and how many major industries will be able to obtain immediate exemptions as happened with the auto industry,” said Marie Ane Madeira, a assistant professor in international relations at Lehayi University.
She added: “I hope that these industries will get many great exceptions and exemptions in a way that actually reduces the possible negative effects.”

How to reduce costs

Companies and industries have several basic ways to circumvent customs tariffs, starting from the process of transferring production to the most creative approach of redesigning the products themselves.
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Pressure for exemptions

One of the strategy is to pressure the government to obtain an exemption or postponement as carried out by auto companies.
President Trump gave auto companies a temporary break from the 25 % customs duties imposed this week on imports from Mexico and Canada.
In theory, companies or commercial groups can ask the United States ’commercial representative’s office exemptions from customs duties.

American companies reaction

Many American companies did this in 2018 after Trump imposed a wide round of customs duties of up to 25 % on Chinese imports.
The US Trade Representative Office received more than 53,000 exception requests between 2018 and 2021, and approved 13 % of them, according to a report issued by the US Governmental Accounting Office.
The lack of transparency in connection with these decisions, which are taken on the basis of each case separately, have been criticizing what they considered the ability of the USA’s commercial representative’s office to “choose the winners and losers”, according to the Congress Research Department.

Transferring sources and production

Companies can also try to change the place where you get their materials or collect their products, although this is often easier to say.
Madeira said that consumer goods are usually imported when they are subjected to the final assembly in another country, regardless of the source of their parts, so the companies can theoretically at least transfer the final stage of the assembly process to the United States.

Doubts over Trump’s policies

Trump’s customs duties policy causes uncertainty in regions with an economy that depends on manufacturing.
Companies can also consider converting their sources from countries such as Mexico and China into places such as Vietnam, Malaysia and Thailand, which are external countries that have not yet joined the emerging trade war.
Madeira says that the companies balanced the cost of disrupting the supply chain and the cost of new customs duties, and there is always the possibility that the United States will impose customs duties on those countries later.

Re -classification and design of products

Companies are trying to declare that their products or goods are treated with a low customs tariff compared to their actual value. Sometimes, this may require rename the product with something else – or at least trying to do so.
“Marvell” succeeded in proving its worth before the court in 2003 by saying that the X -enabled characters are non -human games, which reduced the tax rate on them almost half.