5 years ago

[China-US trade war] former USTR experts: tariff costs are passed on to consumers

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The International Monetary Fund (IMF) report shows that the US government imposes tariffs on goods from China, and the new costs are mostly borne by US importers. Andrew Shoyer, who has worked for US Trade Representative Office (USTR) for many years and is now the co-head of the International Arbitration, Trade and Advocacy Practice Department of Sidley International Law Firm, pointed out that the situation will happen, but this situation is difficult to sustain. Beware.

Andrew Shoyer also noted the report and pointed out that Hong Kong companies have reduced the impact of tariffs by passing on new costs to customers. This situation is related to the fact that the current US economy is more ideal and the US dollar is stronger. If the US economy weakens in the future, consumers will not be willing to bear higher-priced consumer goods. Therefore, he reminded Hong Kong businessmen that they should not be passed on because of the cost. It will not be greatly affected in the future.

Only a few cases were granted an exemption

He also pointed out that in the early days of the trade war, some enterprises exempted the US government from tariffs. However, only a small number of applications were approved. The exemption period was only one year. It is difficult to predict whether an exemption mechanism will be introduced. In addition, US customers can also find alternatives to merchants. Therefore, the exemption is not a long-term policy.

In addition, there is a relocation production line. Andrew Shoyer pointed out that if you want to relocate the production line, you can consider moving to a developing country that can benefit from preferential taxation, such as the United States, or a country or region covered by the US Free Trade Arrangement.

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