china

Chinese Exporters Finding a Unique Way to Skirt Past Trump’s Tariffs

Written by adminJuly 3, 2019

Whether you agree or disagree with President Trump’s policies regarding tariffs, you have to appreciate the sheer genius of businessmen. They’re going to make money any way they can. If they’re not making enough of a profit, they’ll get around their obstacles. That’s exactly what some crafty Chinese exporters have done to get around Trump’s tariffs on their country.

The scheme? To slap “Made in Vietnam” labels on their Chinese goods. It’s sort of brilliant when you think about it. At least, until you get caught. Vietnam said this week that they found dozens of fake certificates and illegal transfers from Chinese companies trying to get around the tariffs. These products include everything from steel to agriculture and textiles.

Earlier this year, President Trump slapped a 25% tariff on $250 million worth of Chinese goods after trade talks have stalled. He’s currently threatening another $300 billion if the government doesn’t come back to the negotiating table in good faith. Not only does Trump feel like the balance is weighed heavily in China’s favor, but they’ve been caught stealing intellectual property. This doesn’t sit well with the president who has been calling out the country since his campaign.

“It’s always a cat-and-mouse game,” said Fred Burke, managing partner at law firm Baker & McKenzie (Vietnam) Ltd. “As long as people are willing to take risks in search of those arbitrages of say 25 percent duties, it’s very difficult to enforce.” Now Vietnam is worried they’ll be hit with a massive fine for allowing the ruse to go on as long as it did.

A New Way to Trade

One way Vietnam found the problem was the massive and sudden shift in Vietnamese products to the United States. China’s shipments have dropped just as quickly. Vietnam itself was asking how this increase in exports happened. Some of it does have to do with an ever-changing supply chain, like the U.S. buying more from Vietnam than China as of late.

Still, many question how much of those numbers are actually accurate and what are phony. Examples of this type of fraud include changing goods made in China to say “Made in Vietnam.” One Chinese plywood manufacturer started sending their goods to the U.S. through a Vietnamese plywood company to hide what it was doing.

“A cottage industry for circumventing U.S. tariffs will likely bloom, given the high tariff rates and huge potential profit,” said Chua Hak Bin, a senior economist at Maybank Kim Eng Research Pte. in Singapore. “ASEAN governments will likely crackdown on such re-routing for fear of being seen as a backdoor,” Chua said, referring to the Association of Southeast Asian Nations.

“Questionable shipments are likely to be a ‘relatively small’ portion of China’s total exports to the U.S.,” said Rahul Kapoor, a senior analyst at Bloomberg Intelligence in Singapore. “There will always be leakages and workarounds to avoid tariffs, but we do not see it as a widespread phenomenon,” Kapoor said.

Written by adminJune 19, 2018

Life Style

It almost seems like we write a new article every day about the impending global trade war, as new developments are happening regularly. We cover this extensively as it’s our goal to help all Americans achieve their dream of living their life financially free.

This trade war will impact all of us, from the big streets in New York to the small farming communities who live and die on the agriculture they produce.

Since before he was elected into office, President Trump has made it one of his main goals to protect American workers, revive near-dead industries, and right the wrongs of the trade deficits we have with countries all over the world.

It sounds like a good idea until these countries decide to rebel and retaliate with tariffs of their own. They’re not happy with the president over this issue and threaten to fight back in their own way. This will translate to misery here in the States.

One of the products China says they will tariff are soybeans, which are grown in abundance in Iowa and other Midwest states, but the Chinese tariffs could become an economic disaster for farmers.

Chad Hart, and economist at Iowa State University, has calculated the farmers in his state will lose as much as $620 million this year alone if China tariffs their crop.

“Any tariff or tax put in place will have a significant impact, not only to the U.S. soybean market, but to Iowa’s because we’re such a large producer. It will slow down the market,” he said.

Soybeans are the most widely planted crop in the U.S., so any tariff placed on it would be disastrous for our agriculture. It might not just be a temporary setback either. Senator Chuck Grassley, a republican from Iowa, believes this could lead to a permanent loss for this area.

“It could be devastating for local communities across the Midwest. It’s also important to remember that when trade barriers go up, alternative sources of goods are found, and new trading relationships develop. A temporary setback could quickly develop into a permanent loss,” he said in an interview.

This can be a nightmare scenario for the Midwest. China imports nearly 61% of the U.S. soybean crop, so this type of loss would be devastating.

Soybeans aren’t the only victim, as other commodities like aluminum, lead, cotton, oil, and gold have been losing their value as Mexico, Canada, U.K., India, and the EU have also threatened to retaliate with tariffs.

The U.S. may be the largest economy in the world…and it’s not even close…but the question remains how big of an impact this would make on U.S. consumers as price hikes will assuredly be passed down to them.

Written by adminJune 18, 2018

Politics

When people talk about World War 3 happening, they didn’t realize it would be in the form of a global trade war that threatened to impact the world’s economies.

So far, we’ve extensively covered President Trump and his attempts to gain fairer trade and the retaliation of China and Europe, but now India is jumping into the fight as well.

This week, India has announced retaliatory tariffs of their own on 30 U.S. products ranging anywhere from apples and almonds to metals and chemicals. These tariffs total around $241 million, which is on par with what India is expected to lose once Trump’s tariff on steel and aluminum goes into effect.

India also plans to increase its already large tariff on U.S. motorcycles like Harley Davidson, an issue Trump has complained about in the past. It seems unfair that countries can have tariffs on U.S. products, but if the U.S. sets a tariff, it’s met with retaliation, so the move speaks volumes.

These new rounds of tariffs are due to take effect on June 21^st and India says they’re open to adding more if necessary.

“India reserves the right to adjust the specific products for which [tariffs would apply], and its right to adjust the additional rate of duty imposed on such products,” they said in a filing to the World Trade Organization.

Currently, the deficit of trade between the U.S. and India sits at $30.8 billion with India getting the advantage. These tariffs are an attempt by the Trump administration for the U.S. to cut the trade deficits that happen worldwide, but our allies won’t have it, which means that the storm clouds are gathering over further economic prosperity worldwide.

Last week, we reported China’s move since a 25% tariff was slapped on Chinese products and Canada’s frustration with the U.S. as well.

The U.S. implementing tariffs to recoup money lost in trade deals seems like a fair deal, but with countries worldwide promising to retaliate (and refusing to back down), industry all across the board will suffer.

If the cost of these products goes up, then that means jobs will be cut and economic production within these industries will slow to a crawl. Losing jobs, especially in recently-hit sectors like the auto industry, would stop the unprecedented growth we’ve seen in recent months.

One can only hope that this situation gets taken care of before a global trade war goes too far and hurts everyone in the process.

Written by adminJune 15, 2018

Politics

Another chapter of this story has been written, as President Donald Trump announced on Friday that the U.S. will indeed impose more tariffs on China. Specifically, a 25% tariff on a variety of Chinese exports number over 1,100 products totaling around $50 billion.

China immediately said they would retaliate with tariffs of their own before accusing the U.S. of starting a trade war.

The justification from the Trump administration? They had it coming. These tariffs are designed to work as a punishment on China for their espionage against us, stealing trade secrets and technology.

“(Trade) has been very unfair, for a very long time. This situation is no longer sustainable,” Trump said later in a statement.

This decision has been in the works for several weeks now, as we previously reported that Trump was looking into different tariffs against China. This came after both sides seemed to come to a deal that had China buying billions in U.S. agriculture. Neither side is looking to back down.

China already has a list of products they claimed to impose tariff’s on if Trump went through with his threat, including transportation and agriculture. They also said they would immediately cancel any recent trade deals made.

“In this day and age, launching a trade war is not in the interest of the world. We call on all countries to act together to firmly stop such an outdated and backward move, and to firmly safeguard the common interest of all mankind,” said China’s Commerce Ministry.

All of this comes not even a week removed from the G7 Summit held in Canada. After fighting with our closest allies over trade, Trump seemed to have angered everyone, including the entirety of the European Union.

Every country has vowed retaliation.

These particular tariffs are set to hit in two waves. The first will come in July and will cover about $34 billion worth of products. The second will come later, so it would seem to be undecided just yet.

Perhaps the time given before these tariffs take hold is a good sign that Trump is holding out hope that a new trade deal will be signed for the betterment of both countries.

Trump has touted unfair trade practices against China and the rest of the world during his campaign. He promised he would put America back on top of trade dominance, hoping it would give a boost to U.S. industries.

“We have a tremendous intellectual property theft problem. It’s going to make us a much stronger, much richer nation,” Trump said in March when he first brought up imposing tariffs this year.

As a citizen, it can be difficult to see how taxing foreign goods will make us a stronger country. This tit-for-tat retaliation will end up forcing the world’s top economic powers to engage in a trade war that threatens to not only hurt jobs, but the extra costs will translate down to the consumer, making products we use every day much more expensive.

Update: As I wrote up this article, China announced their own 25% tariff on about 695 U.S. goods worth near $50, which will hit on July 6^th.

Written by adminJune 12, 2018

Politics

America First. It’s a bold idea that helped win the White House.

During his campaign, President Trump promised Americans that he would fix the trade deficit between countries. It was vastly unfair, in the minds of Trump and the millions who voted for him, that other countries got billions more in goods than we received.

Not only that, the U.S. military was footing the bill for defense, aid, and a lot of other things other countries just don’t seem to want to pay for. To millions of struggling Americans, riddled with doubt, debt, and fear over their futures, the ‘America First’ campaign was a breath of fresh air that could bring our economy back to dominance.

Just ask the people of Michigan who lost thousands upon thousands of factory jobs as a result of their main employers deciding to pull up stakes and head to Mexico. Other states, like West Virginia and Pennsylvania, have a proud history of rolling up their sleeves and providing as the backbone of our country during a crucial time of unprecedented growth. Then came the cheaper steel.

Look at the blue wall that used to have a lock on democratic votes. This year, they all went red, and it was because of Candidate Trump’s message. He promised to get jobs back. He guaranteed he would revive near-dead industry. His bold proclamations demanded justice for decades of unfair trade practices that cost the U.S. billions.

How is that going too fly in an increasingly globalised world? Well, judging by this past weekend’s G7 summit, not very well. While many feel thankful that Trump stood up our country, there are plenty opponents who felt Trump embarrassed the United States.

Regardless of whatever side you’re on, these tariffs can have a real impact on us, the citizens.

Sure, by making Chinese steel more expensive, the U.S. steel industry is roaring back to life. Jobs are flooding back to places where the industry seemed nearly dead. That’s a major positive, but consider how it will negatively impact every company who uses steel. If it’s more expensive for the manufacturer, then that cost will transfer to the consumer.

President Trump has picked economic fights with China, Mexico, Canada, and 28 countries within the European Union. Each one promises retaliatory tariffs if the U.S. goes through with tariffs of his own. This will trickle down to thousands of U.S. and foreign companies, challenging economic efficiency and threaten jobs.

The Council on Foreign Relations came out with a report that stated Trump’s tariffs on steel and aluminum will create some jobs within those industries, but it risks killing 40,000 jobs within the auto industry simply due to the higher cost of making cars. If cars are more expensive to buy, then less people will buy them.

If Trump slaps a 25% levy on cars imported from China, which is his latest threat, it could end up cutting production by 1.5% and kill 295,000 jobs. If the other nations follow through with retaliatory tariffs of their own, it could slow production by as much as 4% and over 600,000 jobs would disappear. These aren’t the type of job losses that would make Trump look good.

Trump’s threats of a trade war have gotten China to back down and come to the table to reach a new trade agreement. Perhaps that’s the goal here. All he has to do is apply a bit of pressure to other countries to get what he wants. No one wants to a trade war with the largest economy in the world.

The problem is not knowing how far Trump will take this.

Written by adminJune 4, 2018

Politics

Just when we thought we had a happy ending to this story regarding China and a potential trade war, both sides seemed to have hardened their positions and waiting for the other side to move.

President Trump has continued his talk of tariffs, which is really angering a lot of our allies, who all threaten to retaliate with tariffs and taxes of their own.

To ease tensions and prevent a trade war, China agreed to purchase billions of dollars of American products, including agriculture, and lower the trade deficit between the two countries. But, as of right now, it would appear Trump is not happy with the deal. He’s still threatening the Chinese with a tax on billions of dollars of imports from China.

“Both sides appear to have hardened their negotiating stances and are waiting for the other side to blink. Despite the potential negative repercussions for both economies, the risk of a full-blown China-U.S. trade war, with tariffs and other trade sanctions being imposed by both sides, has risen significantly,” said Cornell professor Eswar Prasad.

Is President Trump really willing hurt our relationship with a prominent ally in China, who has the second largest economy in the world? The answer appears to be yes. He seems more than willing to wreck whatever relationship is necessary to keep American industry at the forefront and recover some of the billions of dollars lost in unfair deals.

Peter Navarro, who is the director of the White House National Trade Council, confirmed as much on Fox News when he stated China hasn’t been that good of a friend to us.

They’ve been aggressive in the South China Sea, threatened to steal intellectual property, went behind our backs to supply North Korea with goods after committing, in public, to join in the sanctions, and according to the president, has raked us over the coals in regard to trade for many decades.

“That’s a relationship with China that structurally has to change. We would love to have a peaceful, friendly relationship with China. But we’re also standing firm that the president is the leader on this,” said Navarro on “Sunday Morning Futures.”

Trump is still considering more tariffs on $50 billion worth of China’s exports and another $100 billion they would consider taxing to make up for the massive deficit. If this goes through, China threatens taxes and tariffs of their own and to cancel any of the new trade deals that have been hammered out.

It appears to be a tit for tat stare down between the two world’s economic superpowers. No one knows if Trump is serious about imposing tariffs or is just using the tactic for positioning. So far, he has been able to successfully get many countries to come to the table willing to renegotiate deals just to stay in the good graces of the U.S.

President Trump has long believed that other countries have taken advantage of American industry and reap far more benefits from trade than we get in return. It was one of many economic promises he made during the campaign.

Tariffs and a trade war would be bad for the world’s economy and for consumers, who would be required to pay more for tariffed items to cover the increased cost.

We’ll continue to cover this story as it develops.

Written by adminMay 23, 2018

Saving

We’ve extensively covered all the news going down between China and the U.S. A trade war between the two economic superpowers is not a good idea for anyone. China knows that, as does the United States.

President Trump, once again, seemed to apply just enough pressure to get the outcome he desired. His first victory came over North Korea, who agreed to end the Korean War and step across the DMZ at the behest of Trump’s critics who warned his tactics would lead to a nuclear war.

Now, China also appears to be bowing to pressure from President Trump, agreeing not only to end threats of a trade war, but also to purchase “massive amounts” of agricultural products from U.S. farms.

China also agreed to sit down and create a new deal promising to address the massive trade deficit between them and the U.S., a problem President Trump has railed against since his campaign.

According to U.S. Treasury Secretary Steve Mnuchin, this increase in agricultural products should total an additional 40%, which is amazing news for farmers who were worried a trade war would severely hurt their income.

Stocks and Oil Prices

When news first broke that China and the U.S. were soon to be embroiled in a fight, it frightened a lot of investors. Stocks fell sharply after months of historic growth. Now that news of the trade war being behind them and new deals are in place, stocks rose early Monday morning, as did the price of oil.

For the first time since 2014, the price of oil hit the $80 per barrel mark.

OPEC and Russia agreed to cut supply, as well as promised economic sanctions on major oil producer Iran that has many experts believing we’ll see oil prices cross the $100 mark this summer, but now that the trade war talk is cooling, moods are shifting. Some of the pressure on the market is now going away.

“Both sides plan to work on implementing agriculture and energy purchases and to continue to negotiate on manufacturing and service trade, bilateral investment and intellectual property protection in coming months,” said U.S. bank Morgan Stanley.

Now that the U.S. and China are on the same page economically, it can only mean good things for both countries. Trump certainly has a way with getting things done, even if his methods make everyone else nervous.

Written by adminApril 30, 2018

Saving

After President Donald Trump announced he would place tariffs on steel and aluminum to spur on growth in the American markets, several countries freaked out and promised to retaliate with tariffs of their own.

Wall Street reacted accordingly as stocks dropped over 700 points in a single day to the news that the U.S. may soon be embroiled in a trade war.

The main concern has to do with the world’s two largest economies battling it out for supremacy, which would almost certainly leave other countries destabilized and fighting for air.

While the idea of a trade war is unsettling, there’s a chance that Trump isn’t too serious about keeping tariffs up for long. Instead, he might be pushing for better negotiations on a trade deal he’s touted since the campaign trail.

It’s a tactic that has proven to work so far.

All one has to do is look at the North Korea situation. Trump’s aggressive tone had many fearing that WW3 was about to break out any moment, but instead, it brought both sides to the negotiating table. For the first time in over 60 years, the Korean War has officially ended.

In an effort to avoid a trade war with China, a war the U.S. can’t afford to have as its economy recovers from a decade-long recession, Trump has sent a team of experts to Beijing with the goal of leaving with a compromise deal that helps both sides.

Trump tweeted last week that he believes a deal will get done, but some aren’t as optimistic. His team needs to be united on the tenants of the deal to make negotiations simpler, but those he did send don’t seem to be likeminded about what needs to get done. It consists of both free trade advocates as well as trade hawks…two sides who rarely agree on anything.

Chris Krueger, the managing director of the Cowen Washington Research Group, isn’t optimistic about the deal.

“This sets up a bizarre situation where the US team may spend most of the talks negotiating among themselves. It’s hard to picture more unique Trump officials.”

Trump himself believes sending a team with diverse ideas is a great thing, but one is left to wonder, with a recovering economy, if now is not the time to leave it to chance. This is the best chance we have at preventing a trade war, so sending a team that isn’t in agreement won’t be likely to solve the problem.

At the end of the day, a trade war can send the American economy back into a recession and destroy the massive positive movement we’ve seen under the Trump administration so far.

Hopefully the president’s aggressive tactics don’t lead us down that road.

Written by adminApril 16, 2018

Credit & Debt Settlement

The United States is on the verge of a trade war.

In March, President Trump slapped a tariff on steel imports from China and other countries to promote job growth in the steel industry here. The consequences of such a move has doubled the price of steel in a matter of days.

Charlotte-based company Howard Steel has reported to Fox Business that the price of steel started rising the second the announcement was made and changed with each passing day.

“As soon as they even talked about a tariff, we were getting price increases, and they were rapidly going up,” Howard said. “What you bought one day, three days later, even that price had gone up. There was nothing consistent. We still haven’t reached the apex, and I don’t know where it’s at,” said James Howard, owner of Howard Steel

Right now, steel costs around $.68/pound, which is up dramatically from $.38 before the tariffs were announced.

Howard says the tariff is good in theory, and promoting American industry is usually a source of pride for companies like his, but in the end, the price increase is just going to be passed down to the consumer.

“The way I feel about it, in theory it’s a good idea, but I hate to say this, sometimes we can be our own worst enemy, and there’s a little bit of greed that goes through there. Anytime you get these price increases, and the orders are still coming in, well they’re just going to give you another price increase,” he said to Fox Business.

China’s Retaliation

The country hardest hit by these tariffs, other than the United States itself, is undoubtedly China. China is where we bought most of our steel previously, impacting the industry here in the States. Now that industries are buying American steel again, it’s hitting China’s pockets fairly hard.

That’s why China retaliated almost immediately, announcing that they will slap their own tariffs on 106 different U.S. exports, such as soybeans, whisky, and cars. They plan to target as much as $50 billion worth of our products, which is scaring literally everyone else into believing a massive trade war between the world’s two largest economies is only about to heat up.

And they’re right.

Trump Targets Chinese Tech

Throughout his campaign, candidate Trump promised to fight back against what he called ‘unfair trade deals’ the U.S. has with numerous countries, like China and Japan. He says we’ve been at a disadvantage and losing billions in trade deficits for decades.

The steel tariffs were just the first part of Trump’s plan.

Next, he says, the focus will be on China’s tech industry as a means of punishment for technology transfer policies that hurt the U.S. Trump hopes to hit $60 billion worth of ‘largely high-tech’ products within the next few months.

Which China continues to improve their technology manufacturing to boost their economy, perhaps Trump is looking to take a swing at the market to remain a global technological superpower.

Not all hope is lost, though.

According to Robert Lighthizer, a U.S. trade representative since the Reagan Administration, it’s an old tactic to announce tariffs to force both parties to the table for renegotiation.

In the end, no one wants to see a trade war that could ultimately hurt both economies. And where the U.S. and China goes, the rest of the world will follow. Hopefully this is nothing more than a negotiation tactic that will lead to better and improved trade relations between the U.S., China, and everyone in between.

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