Comment on Trump says he plans to put a 100% tariff on computer chips, likely pushing up cost of electronics

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partial_accumen@lemmy.world ⁨1⁩ ⁨day⁩ ago

I’m guessing the chip in the finished product would be taxed separately, otherwise it would be trivial to dodge the tariff (just package the chip in a different “finished product” and move it to a US-made product).

You’d guess wrong. Welcome to the wonderful world of tariffs and import/export controls!

I wouldn’t call it a trivial dodge because the act of building the tariffed good into another product takes time and resources at the origin side, then again at the destination side to undo the manufacturing steps. However, sometimes its worth it to a company. There are lots of examples of companies doing exactly this.

Ford Transit Connect cargo vans were made in Turkey. Ford wanted to import them to the USA. However, there was a tariff placed on vehicles for commercial use, so Ford installed cheap passengers seats in the back and imported them as passenger vehicles. As soon as the vehicles would arrive onshore in the USA, Ford would rip the cheap seats out, and sell them as commercial vehicles.

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