Many producers in China already lie outrageously undervaluing the declared value of their exported goods to evade the import tariffs Trump imposed six years ago. - fortune.com
"The declared value of goods in a typical 1,172 cubic foot container from China to the U.S. usually ranges from $5,000 to $10,000, the correct range of value if the shipping container were filled with 50 pound bags of sand."
Amazon sellers have told Fortune that this number is fantastically and unbelievably low, especially for the home and garden category, which includes furniture products. This is a tiny fraction of the real value of the goods contained in shipping containers. "They aren't held accountable for customs fraud, and the tariffs will drastically increase their competitive advantage," the U.S.-based household goods entrepreneur said of China-based rivals that intentionally mislead customs about the value of their imports.
Major Chinese manufacturers are now trying to keep their businesses humming by offering a simple—but illegal—solution to U.S. Amazon sellers: lying about the value of the Amazon merchandise you are importing to the U.S. in an effort to lower the duties you'll have to pay under the new slate of tariffs.
Yes, that sounds a lot like customs fraud. Trump and DOGE has proposed solving this problem by halving the number of US Customs Import Inspectors.
In emails and WeChat messages viewed by Fortune, around a half dozen Chinese suppliers proposed such illegal workarounds to executives from a mid-sized household goods brand with a large presence on Amazon.
"Many US companies use a lower value invoice to make customs clearance to reduce the tariff," one supplier wrote to the U.S. brand. "You can think about it."
"We can revise the declared value on commercial invoices to help duty costs," another said.
Some also proposed another workaround called Delivery Duty Paid or DDP shipping. In this scenario, the supplier would handle getting the goods through customs, rather than the U.S. brand, and lie about the value of the shipment essentially on the brand's behalf. The goal of this, at least in part, would be to create an artificial buffer between the U.S. seller and customs.
"Some have mentioned that they are doing this already for many of our competitors," the founder of the household goods brand told Fortune. He requested anonymity to speak freely about the situation and to not burn long-time suppliers whose manufacturing he may still need. One of his suppliers said in a message viewed by Fortune that some China-based Amazon sellers use the same strategies to lower their custom bills.
Smaller importers probably don't understand the legal trouble they can get into by following their suppliers' problematic advice. |
