The return of Trump-era tariffs is stirring up talk about global trade and how to fix long-standing problems. The earlier tariffs had plenty of loopholes, giving some shippers a free pass. The new measures could be a lot broader, impacting the economy in bigger ways. It all comes down to how the administration plays it—will they stick to quick fixes, or take a more targeted approach?
Strategy matters—a lot
Superficial vs. Strategic
If this is just about scoring political points, the focus will likely stay on China and USMCA partners, going after obvious targets like popular trade categories.
Going deeper
A well-thought-out plan could address the problems in global trade. This might give US manufacturers and legit importers a fair shot.
Two big challenges to watch
The offshore shuffle
Many large Chinese producers have set up factories in Thailand, Cambodia, and Vietnam. This includes some of the most targeted categories like tires, solar panels, etc. So if they really want to address non-competitive behaviour, they would need to target wider Asia as well as target specific owners of factories.
A loophole big enough for 1.5 billion packages
Ever heard of the de minimis exemption? It lets goods under $800 skip tariffs and regulations entirely. Sounds small, but it’s massive. The bigger issue that everyone seems to be ignoring, is the massive amount of Chinese products that are entering the country not only bypassing tariffs but also duties and any sort of regulation. A staggering 1.5 billion packages, mostly from China, are imported annually under the Deminimis exemption. CBP claimed in a recent article that de minimis shipments account for 92 percent of all imports. We are assuming CBP is calculating by number of shipments and not by value, but even based on that assumption, this number is so staggering it simply feels incorrect.
What this means for the economy
Unfair game
Flooding the market with cheap, unregulated imports hurts legitimate businesses.
Shaky trade relationships
Ignoring these gaps makes our trade partners lose trust in the U.S. system.
Small businesses suffer
The little guys get hit hardest, widening the gap between them and larger competitors.
So the question is, will the Trump administration try to level the playing field for legitimate importers and manufacturers or will we continue to see duty and tax evasion of historic proportions?
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