The ongoing trade tensions between the United States and China have taken another step as President Donald Trump announced additional tariffs on Chinese imports. The move, aimed at countering customs fraud and trade malpractices, is expected to impact various industries. While some experts argue that China has relied on price absorption strategies to maintain its market share in the U.S., the effectiveness of these tactics may be limited under stricter enforcement. The decision also ties into broader concerns over illegal drug trafficking and intellectual property violations, which the administration has cited as justification for the new measures.
Similar policies have been enacted in previous years, with earlier tariff implementations leading to retaliatory actions from China. Earlier trade disputes also saw reports of Chinese exporters bypassing regulations by rerouting goods through third-party nations to evade tariffs. The U.S. government has repeatedly criticized such practices, citing them as unfair trade behavior that affects domestic industries. While previous administrations approached the issue with negotiations and partial agreements, the current measures signal a renewed focus on enforcement rather than diplomacy.
How Are Chinese Companies Responding to the Tariffs?
Trade expert Daniel Pickard suggests that Chinese exporters may continue tactics such as absorbing tariff costs to sustain their U.S. market presence. He noted that China has used similar strategies in the past, attempting to offset economic slowdowns by driving exports. However, the scale of the new tariffs, combined with heightened scrutiny, may make these efforts more difficult to sustain over time.
“What we have seen repeatedly with a lot of the Chinese products is that they choose not to pass along that duty, but they actually absorb that cost and keep their price the same in the United States in attempts to continue to buy market share,” Pickard stated.
What Measures Are Being Taken to Prevent Tariff Evasion?
Authorities have raised concerns about methods used to bypass tariffs, including mislabeling products or rerouting shipments through intermediary countries. Pickard highlighted instances where goods were allegedly rebranded in nations such as Thailand or Malaysia to conceal their Chinese origin before being exported to the U.S.
“What we’re seeing over and over again are essentially transshipment issues where China is shipping product to Thailand or Malaysia or sometimes Canada or Mexico, and then someone in that country is removing the ‘made in China’ indication, indicating that it’s now ‘made in Thailand,’ and shipping it into the United States, and therefore avoiding the duties,” Pickard explained.
U.S. Customs and Border Protection (CBP) has pledged to strengthen enforcement by using tools such as increased inspections and targeting high-risk imports. The agency emphasized its commitment to ensuring a fair trade environment while addressing fraudulent activities that undermine tariff policies.
“Trade Enforcement Operational Approach demonstrates how CBP is using all of its authorities to combat trade fraud,” CBP stated, adding that it will “use all methods at its disposal—including increased bonding, enhanced targeting and inspection of high-risk imports, and swift and thorough review of allegations.”
Members of Congress have also introduced legislative measures to address tariff evasion. Representative Ashley Hinson proposed a bill aimed at holding China accountable for trade-related crimes. The legislation seeks to establish a task force dedicated to investigating customs fraud and increasing penalties for violations.
“By strengthening the Trump’s DOJ’s ability to detect and prosecute international trade crimes, my bipartisan bill will ensure that Communist China and other perpetrators are criminally liable for illicit activity and that penalties are enforced,” Rep. Hinson said.
The long-term effects of these tariffs and enforcement efforts remain uncertain, as China may introduce countermeasures in response. Previous trade disputes between the two nations have resulted in retaliatory tariffs on American goods, impacting various sectors, including agriculture and technology. Given past patterns, further escalation in trade restrictions could emerge, affecting global supply chains and economic relations. Businesses operating in both countries will need to navigate these barriers while monitoring potential diplomatic developments that may influence future trade policies.
