Theoretically, tariff is a tax gathered by a country on imported goods in the border. Practically, tariff is another revenue gain for government and help domestic goods to compete with imported goods. However, tariff dodging has screwed up the benefit into greater imported goods dependence. Importers take for granted legal loophole, they are also lying to customs inspectors about made-in-China.
Made-in-China goods entering U.S. with tariff dodging reached $100bn in 2021. Worse, it is as much as U.S. fourth largest source of imports. It is above purchases made from Japan and Germany. Last year only, U.S. has bought all made-in-China goods as much as $506 billion. This spending increases by 16% from 2020.
When the issue of U.S. and China trade war surged, China consciously increases tax rebates for its exports. This way can make exporters declare massive overseas shipments. Tariff avoidance data from 2020 doubled in 2021. ‘De minimis’ rule is one of the approaches to exploit tariff. This rule does not burden countries with charge or duties. Most developed countries set the limit to at least $200.
Logistics companies even offer free tariff entry to America. It causes bulk of shipments to Mexico and Canada. Some firms might also manipulate the data to customs inspectors in order to avoid the tariff. Based on some analyses American importers could use cheap invoices supplied from their Chinese suppliers. Worse, there have also been many products using wrong labels from other countries, but those are made-in-China.
Customs and Border Protection, a federal agency released a record of potential evasions of antidumping duties. From thirty seven investigations and twenty four from the previous year, almost all products are from China. One of the investigations reported that Simpli Home has imported Chinese product but falsely claimed from Vietnam.
