There’s a trade war on—here are the rules

| November 21st, 2019

There’s a trade war on—here are the rules
"There’s a trade war on—here are the rules"

On Friday the 11th of October, the Trump administration said that it would postpone a planned hike in duties on $250 billion worth of Chinese products due to a reputed “phase one” trade deal with China. The 14th, it appeared that the “phase one” deal may not be as firm as originally reported, as China wants the administration to scrap other planned tariff hikes before it signs the deal.

In any case, even if this agreement does come to pass, it will not end the current trade war; it just signals that it might not continue to escalate. And regardless, until another deal is signed, jewelry products imported from China remain subject to 15% duties, as they have been since September.

JCK has gotten mixed reports on how the tariffs have affected the industry. But importers from China need to understand that tariffs are in effect on just about all jewelry-related products and to act accordingly.

If I were in the jewelry business and I had different source countries, I would want to understand the implications of all this, so I can make decisions to mitigate my duty exposure,”  says David Sanders, a partner in Cassidy Levy Kent, a Washington, D.C.–based law firm that specializes in international trade and customs law. “It’s just smart business to figure this stuff out.

Before all this, I have never had so many phone calls from CEOs, chief executives,” he says. “But now this affects their bottom lines. It’s become a huge issue. Whole industries are involved.

So how you do minimize exposure to the tariffs? You can move manufacturing elsewhere. But Sanders says that isn’t always so easy.

China is such a huge supplier in some categories. Moving a supply chain to another country depends on the level of complexity. You can’t just snap your fingers and move overnight. It’s not a simple thing, but it needs to be done on a case by case basis.”

Others try a less honest way: They simply export the item to another port and then say the item came from there.

There’s a word for that: transshipping. And if done with an intent to evade tariffs, it is illegal and carries both civil and possibly criminal penalties.

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Source JCK Online

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