Trump admin. says 40 countries are helping China evade tariffs: What to know
00:00 Speaker A
The classical definition of trans shipping is essentially when cargo makes a pit stop in a third country, either sits in the port or gets transferred to a different boat, but then moves on to its final destination.
00:13 Speaker A
The rule there is that it’s still needs to be tariff at the origin. And so policing was relatively simple then. China in recent years has made this more complicated that has really gotten the attention of the Trump administration by by blurring the line about what what’s trans shipping is.
00:27 Speaker A
The the charge here is that China essentially sends parts to a third country that are combined with other parts and then moved on in what is a an intentional tariff avoidance strategy. If you go to a third country that has a lower tariff rate, the final product gets into the US at a lower rate.
00:46 Speaker A
This report today, which came from Peter Navarro’s office at the White House, broadens this even further, essentially to say that nearly every major US trading partner is complicit in this effort. Are you it’s 40 40 of America’s top trading partners.
01:03 Speaker A
The question is essentially what what you can do to to convince the Trump administration that that you’re not transshipping. It’s
01:13 Speaker A
feeds into a kind of an overall question here about Trump’s approach.
01:17 Speaker A
Are they using these issues to essentially do blanket tariffs, no matter what, no matter no matter whether it’s an issue in a specific country. We currently have 10% tariffs, 10 to 12% tariffs over the issue of forced labor. That’s a global tariff, even though forced labor is often a specific regional issue.
01:34 Speaker A
Same, same with trans shipping. It’s a definitely undisputably a major issue around China, whether Switzerland is which is a country named in this report is important for trans shipping remains to be seen. So it’s clearly a kind of warning to these countries.
01:50 Speaker A
There’s no tariffs attached to this right now. Um, so this is a report. Peter Navarro described this as a source of information for a variety of ongoing investigations that the Trump administration is conducting. But they are saying it’s going to be part of bilateral negotiations going on.
02:08 Speaker A
Um, the European Union was mentioned specifically there, even as this kind of this trans shipping case is a little more limited there. So we expect it to be brought up as these two kinds, as as these two trading partners sit down, um, which they do on a on a regular basis.
02:26 Speaker A
Another area to watch here is what this does to the US relationship with China. um, Chinese President Xi Jinping is expected to be here in the United States in in a little over a month’s time. He’s he’s making a a US visit that could be a state visit, it could be a major event to be in September.
02:47 Speaker A
So the question here is essentially how far is Trump willing to go on this transshipping issue? Is he talking about is he actually going to go forward with tariffs on this, um, which which could which complicate relationships in a lot of different factors.
03:00 Speaker A
What the Trump administration is saying is that this means this is tens of billions of dollars in additional tariff revenue. The current tariff rate on um going across the US economy is is 11%. The AL budget lab had a new reading this week on that. So it could tick it up slightly and could push up prices a little bit.