Title: How Companies are Avoiding Tariffs
Headings: How Companies are Avoiding Tariffs
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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: Moving Supply Chains
The most obvious way to avoid tariffs is to modify the supply chain. The American government is levying tariffs on Chinese made goods, and the Chinese government is doing vice versa. Neither of the governments is levying tariffs on the companies themselves. Hence, if a company were to relocate its production, it could avoid paying tariffs. However, this can only be done if the company is large and has a huge market share in the target country. For instance, Harley Davidson has decided to move part of its production to China. This is because there are enough Harley bikes sold in China to justify this decision. Hence, the big firms can dodge the tariffs by relocating their supply chain, but the small firms are not able to do so. The tariffs, therefore, have the opposite effect. They are hurting small American businesses, and they are moving jobs out of the United States.