Up to more than a quarter of American imports are potentially dodging tariffs due to the peculiar nature of their customs reporting. By current US law, customs can be reported in full by a foreign company without arbitrage from domestic American companies. As such, with full control over customs reporting, fraud is rampant, with undervaluation of imports to offset any tariffs.
This ends up hurting American companies that abide by tariff rules. Given the bureaucratic backlog of auditing in customs fraud, this issue is not expected to get better in the short term.
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Up to more than a quarter of American imports are potentially dodging tariffs due to the peculiar nature of their customs reporting. By current US law, customs can be reported in full by a foreign company without arbitrage from domestic American companies. As such, with full control over customs reporting, fraud is rampant, with undervaluation of imports to offset any tariffs.
This ends up hurting American companies that abide by tariff rules. Given the bureaucratic backlog of auditing in customs fraud, this issue is not expected to get better in the short term.
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