Economy Trump's April 2nd Tariffs

[SalvadorAllende]

Many US corporations also are international and they get around or lessen the tariff burden by doing intercompany transfers of goods rather than traditional importing or exporting. My own customer is in the process of creating an FTZ (free trade zone) within their warehousing to avoid the tariffs.

What is the difference between "traditional importing and exporting" and transfers of goods between intercompanies?

IDK about there.. but at least here you can send goods to FTZ without paying anything but you have to pay the tariffs once you clear the goods from it to sell them in the local market so the tariff will add to the final price.

 

[Rational Poster]

What is the difference between "traditional importing and exporting" and transfers of goods between intercompanies?

IDK about there.. but at least here you can send goods to FTZ without paying anything but you have to pay the tariffs once you clear the goods from it to sell them in the local market so the tariff will add to the final price.

They're going to import to an FTZ and hold the stock until Trump inevitably gets rid of the tariffs. They'll turn all their warehouses into FTZs if they have to and just wait.

Also, intercompany goods have a lower value than goods for retail, so while subject to tariff it would end up being cheaper. Most bigger companies are already doing some form of this.

 

[SalvadorAllende]

They're going to import to an FTZ and hold the stock until Trump inevitably gets rid of the tariffs. They'll turn all their warehouses into FTZs if they have to and just wait.

Also, intercompany goods have a lower value than goods for retail, so while subject to tariff it would end up being cheaper. Most bigger companies are already doing some form of this.

Oh. yeah.. so the FTZs are just glorified warehouses basically but they won't sell the goods. It is a good strategy.

Regarding Intercompany.. don't they get in trouble for under-billing? In here we have a customs department that deals with these type of stuff and they are actually pretty sharp at discovering shady stuff.
Some importers under bill to pay less taxes... others more in order to pay more to their headquarters if they are in a country with less taxes on earnings...

I worked with one of the biggest luxury cars brands years ago and they we had to adjust 2% to their prices when importing because they were caught under billing and paying less taxes.

 

[pinger]

https://www.bloomberg.com/news/articles/2025-04-23/us-customs-duties-hit-new-high-as-trump-tariffs-take-effect

Revenue from customs duties spiked more than 60% in April as the first of President Donald Trump’s fresh tariffs took effect, bringing in at least $15 billion, according to Treasury data released Wednesday.

Haha this is the new line of horse shit they are peddling.....

 

[Seano]

I read the article and I am missing the part that "China eased tariffs on multiple US imports". I don't remember reading that part. There seems to be a common theme when talking about China. It is that China sends and sells Americans cheap products but one thing is never addressed by any administration.

China is not just relying on selling and sending Americans cheap products. China has significant knowledge skills that enables them to produce these "cheap items". So I am curious (and this is not just a Trump thing) what is being done on that end?

Link-

MSN

 

[Seano]

The hard thing to understand @Seano was your odd insistence on calling it revenue, as if that would be a revelation, that it would make it all so much better, and that nobody had figured out the IRS means the Internal Revenue Service.

Its not my "insistence" ,its what it is. I really don't understand the confusion here. The money produced by tariffs that is returned to the government is government revenue. Thats just what it is. I really don't know how else I can say it.

 

[Seano]

Haha this is the new line of horse shit they are peddling.....

Its literally just a news story talking about the revenue tariffs have produced. How is it "horse shit"?

You guys need to get your emotions under control.

 

[sickc0d3r]

I live in Argentina and work in customs clearance since 2006. We have one of the most complicated customs system here (gladly is being simplifieddd).

Tariffs are taxes and final consumers pay for it. Anyone who thinks otherwise is a fucking moron.

It is hilarious how some people defend these measures just because Trump did it. If democrats applied these tariffs they would have been called evil communists.

In America, the republican party absolutely can not raise taxes, ever. It is a complete political non-starter at the federal level.

The fact that many people aren't really familiar with tariffs and their effect is a big reason Trump loves them. He knows his budget represents a massive increase to our existing debt (just like it did last time he was potus), so this is how he wants to pay for it, without having to say he "raised taxes".

 

[Rational Poster]

Oh. yeah.. so the FTZs are just glorified warehouses basically but they won't sell the goods. It is a good strategy.

Regarding Intercompany.. don't they get in trouble for under-billing? In here we have a customs department that deals with these type of stuff and they are actually pretty sharp at discovering shady stuff.
Some importers under bill to pay less taxes... others more in order to pay more to their headquarters if they are in a country with less taxes on earnings...

I worked with one of the biggest luxury cars brands years ago and they we had to adjust 2% to their prices when importing because they were caught under billing and paying less taxes.

They aren't undervaluing the goods, they're using the FOB price for intercompany transfers. Which in laymen's terms, would be the cost of producing the goods, not counting insurance and logistics fees. This is how most exporting and importing is already done. Intercompany between their foreign owned manufacturing and domestic owned warehousing and retailers.

The tariff rate would be different on company to company or company to consumer import/export as the good would be valued closer to the retail price. I am not an expert with cars, but I would assume it would be foreign produced and imported by a private dealer, so it wouldn't be an intercompany import/export.

The difference between an FTZ and warehouse from my brief experience with them is that they just require additional layers of security so it can be proved nothing moved in or out of them without getting charged the necessary duties.

 

[SalvadorAllende]

They aren't undervaluing the goods, they're using the FOB price for intercompany transfers. Which is laymen's terms, would be the cost of producing the goods, not counting insurance and logistics fees. This is how most exporting and importing is already done. Intercompany between their foreign owned manufacturing and domestic owned warehousing and retailers.

The tariff rate would be different on company to company or company to consumer import/export as the good would be valued closer to the retail price.

Guess different rules apply.

Taxable value for imports here is CIF/CIP, because it is the value of the goods here... so that is the "national" value of the goods.
For export, is FOB of course.

Also you have to complete a form with several questions and one of them is:
* Seller and buyer are commercially linked? (read it as if they are intercompanies... it is pretty clear in the regulations which is considered this and what not).
* If that is the case.. the value has been affected by it? If was affected.. how much?

So basically if a company sells goods to Argentina (or the whole Mercosur for that matter) they have to sell it to the same price to their subsidiary here and other importers (if they actually do, which most don't).

There is also anti-dumping tariffs to specific products for specific countries if they resolve that the country is importing below their cost to gain market an it is considered unfair trade (basically.. dumping). For example.. some pumps we import pay like a 104% extra tax coming from China, and 58% from Germany.

 

[Rational Poster]

Guess different rules apply.

Taxable value for imports here is CIF/CIP, because it is the value of the goods here... so that is the "national" value of the goods.
For export, is FOB of course.

Also you have to complete a form with several questions and one of them is:
* Seller and buyer are commercially linked? (read it as if they are intercompanies... it is pretty clear in the regulations which is considered this and what not).
* If that is the case.. the value has been affected by it? If was affected.. how much?

So basically if a company sells goods to Argentina (or the whole Mercosur for that matter) they have to sell it to the same price to their subsidiary here and other importers (if they actually do, which most don't).

There is also anti-dumping tariffs to specific products for specific countries if they resolve that the country is importing below their cost to gain market an it is considered unfair trade (basically.. dumping). For example.. some pumps we import pay like a 104% extra tax coming from China, and 58% from Germany.

I would not be surprised if a smaller economy like Argentina would be stricter on this sort of thing.

Pretty sure almost everything imported to the US is charged tariffs on the FOB/wholesale price.

 

[SalvadorAllende]

I would not be surprised if a smaller economy like Argentina would be stricter on this sort of thing.

Pretty sure almost everything imported to the US is charged tariffs on the FOB/wholesale price.

Oh you have no idea.. luckily it is getting less strict here. the more they complicate and restrict things the more we pay.

With tariffs going down here (we are going backwards to Trump) some stuff got actually cheaper.. which in a country that comes from having double and even triple yearly inflation digits for over a decade is a lot.

I don't think it is in the best interest of the US going in the direction Trump is taking them.. but what do I know.. I'm just a sherdogger.

 

[SandisLL]

Oh. yeah.. so the FTZs are just glorified warehouses basically but they won't sell the goods. It is a good strategy.

Regarding Intercompany.. don't they get in trouble for under-billing? In here we have a customs department that deals with these type of stuff and they are actually pretty sharp at discovering shady stuff.
Some importers under bill to pay less taxes... others more in order to pay more to their headquarters if they are in a country with less taxes on earnings...

I worked with one of the biggest luxury cars brands years ago and they we had to adjust 2% to their prices when importing because they were caught under billing and paying less taxes.

No. If you purchase and cover expenses plus do have even profit. Like chinatown tesla ....etc..then...

 

[SandisLL]

Trump tariffs maybe are even not bad idea if had been implemented slowly.

Like you change something a bit and then during next 4 months take probe to see effects and adjust next decisions according to your plan. And ofc repeat cycle.

Trump does wants to act rapidly and quickly without this....

With this I do not agree.

 

[Rational Poster]

Oh you have no idea.. luckily it is getting less strict here. the more they complicate and restrict things the more we pay.

With tariffs going down here (we are going backwards to Trump) some stuff got actually cheaper.. which in a country that comes from having double and even triple yearly inflation digits for over a decade is a lot.

I don't think it is in the best interest of the US going in the direction Trump is taking them.. but what do I know.. I'm just a sherdogger.

I think the real issue with the protectionist approach today, especially with smaller economies, but larger ones as well, is that no amount of protectionism is going to develop say, an Argentine iPhone.

There's a lot of goods and services that consumers from all societies are accustomed to, that can only realistically be accessed via international trade, so why pay more for it?

 

[Rational Poster]

Trump tariffs maybe are even not bad idea if had been implemented slowly.

Like you change something a bit and then during next 4 months take probe to see effects and adjust next decisions according to your plan. And ofc repeat cycle.

Trump does wants to act rapidly and quickly without this....

With this I do not agree.

Imposing the tariffs first and building the industry and manufacturing second just plainly does not make any sense.

 

[jefferz]

I’m still waiting to see if @Rational Poster still thinks BTC is a joke.

Hint: alongside gold, it’s the only asset class up this year compared to the markets

This is a thread about tariff’s.
You can. pM him that question.

 

[44nutman]

Growth continues in Texas manufacturing sector, but outlooks worsen

Texas factory activity continued to rise in April. The production index, a key measure of state manufacturing conditions, was largely unchanged. Other measures of manufacturing activity signaled contraction, however.

www.dallasfed.org

Texas Fed manufacturing survey numbers are terrible. A recession is coming and sadly we have a President who takes naps in public. Our economy is proper fucked

 

[Otto!]

Boasting about a few billions in tariff revenues (passed on to the consumers) while ignoring the much larger damage to the US economy…


“Dad, I just sold your Porsche for $100 “
“What? It’s worth $80,000!!!!”
“yeah but we made $100 !!!”

 

[SandisLL]

Imposing the tariffs first and building the industry and manufacturing second just plainly does not make any sense.

There is big difference will you produce brand type stuff or chips etc or...socks and nails etc...

I don't see bunches of U.S citizens in U.S rushing to work for 1 buck per hour in...relatively modern factory. Or customers happy with smile to tell MAGA when will have to pay 8-10x more for random socks or nails...this is real life.