By Jeffrey A. Newman Esq.
Tariff evasion by foreign exporters including China and U.S. importers could cost the U.S. over $40 Billion in revenues annually according a Goldman Sachs analyst. The evasion includes transshipment of goods through bystander countries which have a lower tariff rate than the major exporting countries. When, for example China ships its goods headed to the U.S., to Malaysia and changes the country of origin from China to Maylasia, those goods are then sent to the U.S. and they get lower tariffs.
Other ways that the U.S. tariffs are evaded includes underreporting values of the products in order to lower the tariff rates. Various data is setting off warnings. Historically, US-reported imports from China exceeded China’s reported exports to the US by about $6 billion a month, partly because of statistical quirks. That relationship flipped during the 2018 to 2019 trade war, and the discrepancy has widened by an additional $4 billion per month this year.
Goldman found that the unit prices or some imports have been cut in ways that are not explained by lower production costs. This suggests that multinational companies may be evading tariffs by lowering reported US import prices, according to the Goldman analyst.
A 40% charge has been introduced on goods that are transshipped through third countries, a measure designed to choke off tariff evasion. It is not clear how much of the tariff evasion is being caught and how best that could be done. Company employees may rerport such fraud through the False Claims Act and receive a percentage of what the government obtains and cases have been brought.
Jeffrey Newman Law is a whistleblower law firm representing whistleblowers reporting violations of export controls, tariff evasion, healthcare cases and other kinds of WB cases. The firm website is www.JeffNewmanLaw.com . Attorney Newman can be reached at Jeff@Jeffnewmanlaw.com or at 978-880-4758
