I thought a majority of Chinese businesses are state owned. Their neighbors understand the stakes though and have demonstrated eagerness to have low US tariff rates. I assume their customs agencies will be on the lookout for this relabeling strategy.
It's going to occur, as it already does occur, for all kinds of reasons, but it's not going to be as simple as you make it out to be. There is a limited capacity to perform this work meaning the costs may not even be competitive with the US tariff in the long run.
> I thought a majority of Chinese businesses are state owned.
Where'd you get that? The state has a significant (though usually less than controlling) ownership stake in about 1.5% of Chinese businesses, and at least _some_ ownership in about 2%.
"The state owns some of this" is, of course, not equivalent to "the state meaningfully controls this".
But in any case for this sort of activity you'd probably just establish new companies, which the state wouldn't have any share in anyway. And, also, this is kinda academic, because you wouldn't be doing it in China, you'd be doing it in some third country and transhipping goods originating in China.
I have never been to China, but you sound informed on the topic - maybe you can weight in on that.
I've heard from various YouTube channels covering news about China, it's social issues and shenanigans that all companies above a certain size are required to have someone on staff that's essentially part of the government. These channels are however mostly run by people speaking very good English, so clearly made for the western market.
But Googling that information seems to confirm it, too. I.e.
> Since 2018, domestically-listed companies are required to establish a party entity.
I cannot speak with confidence on the topic, but from an uninformed spectators perspective, it does sound like timewizards argument was correct?
> I thought a majority of Chinese businesses are state owned.
That’s not how things work, they care about control not micromanaging everything. There are rules favoring majority Chinese owned companies, but that doesn’t need to be government ownership.
The CCP only really cares about large companies or specific industries like media. There’s minimal interference in a food truck and thus most companies that are small, but things get more involved as you scale. Critical industries like shipping and electricity have government owned businesses running things.
Long term it will work. If foreign govt allow getting around tariffs, according to trump import deficit formula, tariff on the govt will go up. Usgov could also increase tariff on countries with more companies doing tariff shenanigans. The problem is with american 2 year election/midterm cycle no one believes that this will last more then 3-6 months now.
It's going to occur, as it already does occur, for all kinds of reasons, but it's not going to be as simple as you make it out to be. There is a limited capacity to perform this work meaning the costs may not even be competitive with the US tariff in the long run.