Importers Finding Ways to Dodge Chinese Tariffs, Says WSJ

New York, NY, October 9, 2018-Some Chinese importers are altering the Harmonized Tariff Schedule (HTS) destination codes on products in order to dodge tariffs, reports The Wall Street Journal. 

There are 18,927 codes in total, which the paper refers to as a “common language to bridge disparate markets and identify products in all their variety.”

HTS includes 88 separate plywood codes, differentiating by types of wood and thickness variations down to the millimeter, and the Journal reports that, “the Decorative Hardwoods Association has long said Chinese plywood imports crowd out thousands of American jobs and put mills out of business. The U.S. Commerce Department opened a dumping investigation in November 2016 relating to the most common type of plywood, called hardwood-faced.

“Almost immediately, Chinese producers began to ship plywood under four other codes, from 4412.39.10.00 through 4412.39.50.00, attorneys say. These codes apply to softwood-faced plywood, which is slightly different and drew low tariffs ranging from zero to 8%.

“U.S. imports of Chinese hardwood-faced plywood fell 20% in 2017. Imports coded as softwood-faced plywood soared 549%.

“In November 2017, the U.S. imposed a 183.4% antidumping tariff on hardwood-faced plywood. Chinese shipments under the four softwood-faced plywood codes rocketed higher. They were up 983% in the first half of 2018 from a year earlier.”

The article reports that Chinese importers are also re-routing their China-made goods through third-party countries as a means of avoiding tariffs.