What do you manufacture? Would you be interested in a startup that offered you a waiver of these tariffs?
My prior point was you will start seeing start ups pop up left and right offering “tariff free imports/importing for US manufacturers as a service”. Somehow that is controversial enough to be downvoted without a reply I’m not sure why.
Please don't hijack HN threads that way.
We detached this subthread from https://news.ycombinator.com/item?id=17320879.
It also seemed relevant to mention the original comment being downvoted (without any replies) in an entire thread where no one else mentions the ability for manufacturers to avoid these types of tariffs.
Your point to me would seem to argue that forcing companies to dig holes is good because it will create a bunch of new hole digging startups.
I’m definitely not arguing that it is good, just acknowledging that’s the way the World works. Just as you acknowledge you don’t understand how to avoid the tariffs, all these comments suggest the same, but I assure you the special interests who got this legislation past have no intention of paying them.
But now when you see the inevitable “tech start up(s)” who take advantage and offer it as a service being championed as disrupters, you can laugh with me at the irony.
Let's say I'm Apple. I make MacPro's in Ft. Worth, Texas. The parts come from China.
I now have to pay 25% more on those parts.
However, since I'm Apple, I have manufactures making iPhones in China.
So rationally, my best bet is to shut down my US based plant in Texas and move MacPro manufacturing to one of my factories in China.
That way I legally dodge the tariffs since the finished MacPros are NOT taxed.
While this is good for China, and a net zero for Apple, it kind of sucks for the poor American workers in Texas who are now out of a job.
You create a Foreign Trade Zone, ship your components there and manufacture there...you don’t pay tariffs on those Chinese components.
Now the idea with political cronies/tech start ups that can raise SV funding, they will create one and turn around and offer manufacturers the opportunity to use the zone for their manufacturing (a la the Uber of Foreign Trade Zone/Free Trade Zone)
Edit: Just checked, and as one might expect Apple already operates out of Foreign Trade Zones
However enterprises like Apple will still find it cheaper to move to China.
VC may be reluctant to invest in such startups due to the fact that the current administration has been, how shall we put it...inconsistent? They are just as likely to revoke the tariffs in a month as they are to change the goods covered under it or expand it. Either change could make such a startup completely obsolete in no time at all.
Step 2: get VC to give you funding at ridiculous valuation
Step 3: market yourself as “tech” start up, that is hacking the (new) law, and disrupting globally industry (of course said start up isn’t actually doing anything new that the manufacturing industry hasn’t always done)
Sources: I was involved in one for an e-bike manufacturer (set up right next door to a craft brewery)
https://en.m.wikipedia.org/wiki/Foreign-trade_zones_of_the_U...
https://www.cbp.gov/border-security/ports-entry/cargo-securi...
So the minute your startup sells me a chip for use in the US and it then leaves the free trade zone the tariff becomes due.
If I import the chip and use it as a component in my manufacturing of the end product I don’t pay the tariff on that chip.
The idea of the startup, as I mentioned in another comment, would be creating the zone and charging manufacturers to use my Zone. Like an Uber or On demand or WeWork (whatever SV analogy works best for you) of Foreign Trade Zones.