Tariffs are still imposed on over 370 billion of Chinese imports in an attempt to shift manufacturing to the United States. This off course has not materialized. Instead of moving their manufacturing back to the U.S. or other countries, U.S. Companies are tweaking their assembly lines and Shipping Routes to keep keep most of their operations in China which results in not paying tariffs to the U.S. Government. It off course resulted in creating more business for logistics companies.
How are companies skirting Tariffs?
1- The most common approach is to appeal to the U.S. trade representative from paying tariffs. Only 2 out of 10 application are approved.
2- Logistics Consultants have noticed that companies manufacture a key component in Vietnam, ship it to China for final assembly. According to those familiar with U.S. customs, such approach will allow companies to declare this product as made in Vietnam and avoid paying the extra duties.
Decades of rulings from U.S. Customs determine when a collection of parts becomes a product, for example when wire, plastic framing and a solar sheet can called a solar panel and subject to extra duties? If the Photovoltaic cells are made in Vietnam , yet the solar panel is assembled in China, the tariffs can be avoided as the product can be claimed as made in Vietnam.
3- Another strategy has eliminated extra duties for retailers who route small shipments of Chinese products through Mexico or Canada, Federal Law allows companies to import packages valued at less than $800 without paying the Extra Duties.
According to a spokesman for International 3PL one of the leading 3Pl Companies in Doral have seen an increase in shipments to fulfillment centers across the border. Packages are then shipped to the U.S.