Some are moving factories out of China. Others are strategically redesigning products. Some are seeking loopholes in trade law or even mislabelling where their goods originate – all with the goal of evading President Donald Trump’s sweeping tariffs on goods from China.
Trump launched the world’s biggest trade war since the 1930s by imposing tariffs on US$250-billion in Chinese goods and threatening to tax US$300-billion more. He has pursued separate battles with America’s allies, too – from South Korea, Mexico and Canada to Japan and the European Union – over trade in steel, aluminum and autos.
The trend of manufacturers leaving China predates Trump’s trade wars. With wages and other costs in China rising, companies were already shifting toward lower-wage countries, from Vietnam to Mexico.Hurt by Trump tariffs on the metals used to make brass, Coins 4 U, which markets coins for awards and promotions, last year moved production from China, where it had been manufacturing since its founding in 2013, to Lake Ronkonkoma, New York.
Columbia’s Sorel Style shoe, for example, features a hidden wedge heel that requires proprietary tooling and machinery. Moving its remaining production out of China, Columbia says, would cost at least US$3-million in machinery, require it to hire and train a new workforce and delay production at least a year.
Some are trying not-so-legitimate means, too. Chinese exporters have tried to evade U.S. tariffs by sending honey, steel, ceramic tiles and other goods through Vietnam and relabelling them as Vietnamese, according to the country’s customs agency.
globebusiness So companies are doing the same thing they do regardless of who is in power