Russian media said that American companies obviously do not support the Trump administration's growing provocation. The losses caused by the trade war have been billions of dollars. American companies that are unwilling to continue to lose money have come up with tax avoidance methods and continue to purchase Chinese products regardless of new tariffs.
According to the Russian news agency Moscow on November 27th, as early as the US government announced in the future to impose restrictions on China, in August, American entrepreneurs begged for mercy. New tariffs will hit them and cause all commodity prices to rise: from bicycles and car seats to refrigerators. The leaders of nearly 400 large American companies have tried to impress the Trump administration through trade representatives, trying to exclude their products from the final taxation list.
According to reports, the increase in global supply chains in recent decades has caused the United States to move most of its production overseas. Therefore, the company has no choice but to rely on foreign materials including Chinese products. The trade representative tried to explain this.
In July, the president of a company pointed out that "we support the president's intention to protect US companies, accelerate economic growth and increase US jobs. But the proposed increase in tariffs will be counterproductive."
According to the report, the 10% tariff on the US$200 billion Chinese exports to the US came into effect at the end of September. In response, Beijing also imposed tariffs on US goods valued at $60 billion.
So what American companies can do is only calculate losses. But economic interests always make people show wisdom. As a result, the company successfully circumvented the 25% tariff – this was Trump’s announcement in June that it would impose $34 billion on Chinese exports to the United States.
According to the report, UBS found that many US companies have adopted a “smart wayâ€: they have transferred individual parts of the commodity production chain from China to other countries in order to avoid taxation.
Paul Donovan, a chief economist at UBS, explained: “Companies are likely to import Chinese goods through foreign affiliates, such as in Canada. For example, US companies importing electrical switches from China have to pay new Trade tax. However, US companies that import through Canadian subsidiaries with Chinese electrical switches do not need to pay this tax."
In this way, the company can import as many Chinese switches, but these switches are obtained from third-party countries outside China.
According to the report, bank economists stressed that there is no evidence that American companies do use this trick. But a series of "obvious signs" can point out that this is happening.
In particular, with the increase in tariffs imposed by the United States, China’s exports to Canada have surged, while supply to the United States has declined accordingly.
According to the report, UBS analysts stressed that “the surge in demand for other Chinese goods in the Canadian market has also been observed. The trade pattern formed by the United States after implementing trade restrictions measures is clearly thought-provokingâ€.
Analysts also said that the tax avoidance process used by US companies is difficult to expose.
According to the report, this method is most effective for multinational companies headquartered in the United States but with global production companies. For them, the small parts of the product are moved to different factories – this is a fairly simple operation and very difficult to monitor.
According to the report, nearly half of the companies surveyed said that they lost market share in other countries due to trade wars. In particular, US companies have admitted that they have begun to lose to competitors in Vietnam, Germany and Japan.
The survey shows that it is American companies that consider themselves to be the main victims of trade wars. Obviously, entrepreneurs will have to play a variety of new tricks to avoid even greater losses.
Power Screwdriver,Electric Screwdriver,Ratchet Screwdriver,Cordless Screwdriver
Ebic Tools Limited , https://www.ebictools.com