Title: How Companies are Avoiding Tariffs
Headings: How Companies are Avoiding Tariffs
MSG Management Study Guide
How Companies are Avoiding Tariffs
In this article, we will have a closer look at some of the shenanigans that companies are using in order to avoid tariffs.
Moving Supply Chains
Transshipments
Minimal Processing
Trade Zones
Bonded Warehousing
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Globalization

Content: The problem with changing the supply chain is that it is an expensive and a long drawn process. Building factories take time. Hence, these decisions are only effective in the long run. Transshipments
Another shenanigan commonly used by companies is to dodge tariffs is a technique called transshipments. This works by disguising the place of origin of the goods. For instance, Chinese goods meant for America will not directly go to America. Instead, these goods will be shipped to a country like Malaysia. America has imposed tariffs on Chinese goods but not on Malaysian goods. Hence, Chinese companies send their shipments to Malaysia. They often have a partner company which is incorporated in Malaysia.