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American Focus > Blog > Economy > Chinese exporters undervalue cargo to skirt Trump tariffs
Economy

Chinese exporters undervalue cargo to skirt Trump tariffs

Last updated: May 6, 2025 12:42 am
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Chinese exporters undervalue cargo to skirt Trump tariffs
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Chinese manufacturers are finding ways to bypass the tariffs imposed by the Trump administration by engaging in fraudulent practices such as undervaluing cargo sent to the US. This exploitation of the system has become a challenge for American authorities to monitor and regulate effectively.

According to a report by the Financial Times, Chinese chemicals and packaging suppliers have been offering to send goods to small US companies with “delivery duties paid” through a process known as DDP. This process allows exporters to cover tariffs, but some suppliers have been taking advantage of it by intentionally undervaluing the goods or altering their descriptions to reduce the duties owed.

Ryan Petersen, the CEO of logistics platform Flexport, noted that there has been an increase in instances where Chinese factories offer to pay customs duties for companies and then sell them merchandise in the US at prices below the actual duty rates. This practice not only undermines efforts to encourage US companies to source products domestically but also temporarily shields American consumers from some price increases on everyday goods.

US lawyer Dan Harris emphasized that while federal prosecutors could go after US companies colluding in this practice, it is challenging to pursue Chinese counterparts. This unethical behavior puts law-abiding companies at a disadvantage and hampers fair competition in the market.

Business owners like Aaron Rubin, who runs a logistics company and a martial arts equipment distributor, have reported such approaches to US Customs and Border Protection. Rubin expressed concerns that competitors accepting these deals put compliant companies like his at a significant disadvantage, ultimately hindering his ecommerce business.

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Moreover, some Chinese companies have offered to register as a “foreign importer of record,” making them legally responsible for paying any duties owed. The US government’s lenient regulations allow foreign companies without a physical presence in the country to register as importers by posting a small bond, making it difficult to enforce penalties effectively.

In response to these fraudulent practices, Senator Bill Cassidy from Louisiana is working on a bill to increase visibility in international supply chains and enhance customs enforcement. The US Customs and Border Protection stated that they enforce tariffs using legal authority, advanced systems, and operational procedures, and recent presidential actions will result in severe penalties for violators.

Chinese logistics managers have also resorted to creating shell companies and shipping goods via third countries to evade tariffs, as reported by Nikkei Asia and the Financial Times. This ongoing challenge highlights the need for stronger regulatory measures to combat fraudulent practices and ensure fair trade practices in the global market. The field of artificial intelligence (AI) has seen tremendous growth and advancement in recent years, with applications ranging from self-driving cars to medical diagnosis. One area of AI that continues to evolve is natural language processing (NLP), which aims to enable computers to understand and generate human language.

NLP is a subfield of AI that focuses on the interaction between computers and human language. It involves tasks such as text classification, sentiment analysis, language translation, and speech recognition. NLP algorithms use machine learning techniques to analyze and understand text data, which can then be used to automate tasks, improve customer service, and even generate content.

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One key advancement in NLP is the development of transformer models, such as BERT (Bidirectional Encoder Representations from Transformers) and GPT-3 (Generative Pre-trained Transformer 3). These models have significantly improved the performance of NLP tasks by learning contextual relationships between words and sentences. They have been used in various applications, including question answering, text summarization, and language translation.

Another important development in NLP is the rise of transfer learning, where models are pre-trained on large amounts of text data and then fine-tuned on specific tasks. This approach has proven to be highly effective in improving the performance of NLP models, especially when limited labeled data is available for a particular task.

In addition to these technical advancements, ethical considerations in NLP have also gained prominence in recent years. Issues such as bias in language models, data privacy, and the impact of AI on society have sparked discussions among researchers, policymakers, and the general public. Efforts are being made to address these concerns and promote responsible AI development in the field of NLP.

Looking ahead, the future of NLP is promising, with continued advancements in technology, research, and applications. As NLP models become more sophisticated and powerful, they will be able to handle more complex language tasks and support a wider range of applications. With the right balance of technical innovation and ethical considerations, NLP has the potential to revolutionize how we interact with computers and communicate with each other.

TAGGED:CargoChineseExportersSkirtTariffsTrumpundervalue
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