US Companies Find Clever Way to Beat Tariffs

US Companies Exploit 1988 Tariff Loophole to Reduce Costs Major American corporations are employing a little-known provision in the US tariff code to mitigate the impact of rising import duties. This 1988 regulation allows tariffs to be calculated based on the lowest price point in a product's journey from origin to the US market. This means that if a shirt is manufactured in China for $5 and sold to a US retailer for $10, tariffs are levied only on the $5 price, resulting in significant savings for the importing company. "This loophole, while not new, has seen a resurgence in popularity due to recent tariff increases," explains an Al Arabiya Weekend report. The report uses this shirt example to illustrate the financial benefits. The renewed focus on this strategy highlights the challenges businesses face in navigating complex trade regulations. While this legal tactic is perfectly legitimate, its widespread use raises questions about the fairness and effectiveness of current tariff policies. The situation underscores the need for a thorough review of trade regulations to ensure they remain relevant and equitable in the face of evolving global commerce.