Companies mislabelling products, moving factories out of China to avoid Trump tariffs

Companies mislabelling products, moving factories out of China to avoid Trump tariffs

Some are moving factories out of China. Others are strategically redesigning products. Some are seeking loopholes in trade law or even mislabeling where their goods originate — all with the goal of evading President Donald Trump’s sweeping tariffs on goods from China.

But most of the companies that stand to be hurt by Trump’s tariffs are hunkering down and waiting — waiting because they don’t know when, whether or how his yearlong trade war with China will end or which other countries the president might target next.

Trump launched the world’s biggest trade war since the 1930s by imposing tariffs on $250 billion in Chinese goods and threatening to tax $300 billion more. He has pursued separate battles with America’s allies, too — from South Korea, Mexico and Canada to Japan and the European Union — over trade in steel, aluminum and autos.

Vietnam is enjoying an investment boom as companies seek alternatives to China. But Vietnam’s population is about 97 million — fewer than some individual Chinese provinces — and wouldn’t be able to meet demand.

A survey by the American Chamber of Commerce in South China found that U.S. manufacturers had suspended nearly half their investment projects valued above $250 million because of uncertainty in U.S.-China trade relations.

GoPro, the action-camera maker based in San Mateo, California, reiterated its plan to evade Trump’s tariffs by moving its production of U.S.-bound cameras from China to Mexico. Yet before the month was out, Trump had threatened to impose heavy tariffs on Mexican imports — to pressure Mexico to stop the flow of Central American migrants to the southern U.S. border. Though Trump later dropped that threat, the incident highlighted the way the mercurial president can upend the rules of trade on a whim.

Likewise, Vietnam’s status as a tariff safe haven may prove fleeting.

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