Of course the circumvention of the "chicken tax" is probably the most well-known example of tariff engineering:
> Ford imported all of its first-generation Ford Transit Connect models as "passenger vehicles" by including rear windows, rear seats, and rear seat belts. The vehicles are exported from Turkey on ships owned by Wallenius Wilhelmsen Logistics (WWL), arrive in Baltimore, and are converted back into light trucks at WWL's Vehicle Services Americas, Inc. facility by replacing rear windows with metal panels and removing the rear seats and seat belts. The removed parts are not shipped back to Turkey for reuse, but shredded and recycled in Ohio. The process exploits the loophole in the customs definition of a light truck; as cargo does not need seats with seat belts or rear windows, presence of those items automatically qualifies the vehicle as a "passenger vehicle" and exempts the vehicle from "light truck" status. The process costs Ford hundreds of dollars per van, but saves thousands in taxes. U.S. Customs and Border Protection estimated that between 2002 and 2018 the practice saved Ford $250 million in tariffs.
…who noticed something interesting while looking at a book of tariff classifications. "Dolls," which represent human beings, are taxed at almost twice the rate of "toys," which represent something not human - such as robots, monsters, or demons. As soon as they read that, Sherry and Indie saw dollar signs. it just so happened that one of their clients, Marvel Comics, was importing its action figures as dolls.
…
So Sherry and Indie went down to the customs office with a bag of XMEN action figures to convince the US government that these mutants are NOT human.
I'm going to start compiling a list of stories to reply with when people say "environmental activists are too preachy/emotional about their work" and the Ford motor company manufacturing seats, seat belts, and windows, shipping them in vans to get out of a few thousand dollars in taxes per vehicle, and then shredding those things without them seeing a single ass in their entire existence after removing them from the vehicles for "recycling" is a great first item.
This legit made me ill and the people responsible for it, the people who permitted it, and the executives who oversaw it should all be in prison.
> certain women’s garments with “pockets below the waist” get lower duty rates than those without. Because of that, a number of the women’s shirts Columbia Sportswear makes are intentionally designed with tiny pockets near the waistline, which lowers the cost of importing them.
I work in a different industry (but still manufacturing) and it's mind boggling how much brain power and employee time is devoted to "correctly" interacting with the customs and importing system. I wouldn't be surprised if 30% to 40% of the total man hours at some companies are spent directly or indirectly related to the HTS system. This includes products built in North America - you still need to do a huge amount of accounting to show that you're meeting [one of the] the definition[s] of substantial transformation.
I can't really frame this as a global criticism either, the system has clearly evolved around the fact that importers of cheap overseas goods are constantly trying to game the rules to pay lower tariffs than competitors (see Ford with the Transit Connect).
The most frustrating part is political, and two parts:
* US politics have destabilized so much in the last decade that the rules are constantly changing, exceptions being granted and taken away, etc. This has dramatically increased the amount of brain share devoted to tariff engineering rather than product engineering.
* The tariff exclusion process (especially the recent Section 301 tariffs) is heavily lobbyist based. Small players are basically crushed while larger competitors are granted exclusions.
I worked on my first (and my company's first) hardware product and the HTS regulations were absolutely eye opening. I lived my entire life without knowing about it until I had to actually deal with import/export of a product. It is mind numbing dealing with it. Correctly discovering, interpreting, understanding, categorizing, and conforming with the worldwide process is its own form of career specialization (and hell). No thank you, never again.
A bit related: In the early aughts we bought a Porsche 911, which had a ridiculously tiny back seat. According to the dealer, it existed because two-seaters were considered sports cars and were therefore costlier to ensure.
Worked out perfectly for us because our children were young, we lived at the beach, and driving them to school on the freeway was an absolute blast.
That sounds like some sort of urban legend that originates from people repeating what other people think they know about how insurance works... like the long debunked "red cars cost more to insure".
It really doesn't pass the sniff test, because insurers don't need to know how many seats a car has to determine whether or not a vehicle is a sports car. The make and model is sufficient to determine this. Insurers already have a list of all known mass produced vehicles and their attributes.
Also, most insurers don't rate "sports cars" as more expensive than other cars, outright, because sports cars are not overall actually riskier to insure than non-sports cars. The risk of the driver matters quite a bit more than the car. If you look at IIHS loss data, you'll find that cheap vehicles marketed to subprime markets often have higher liability loss rates than untrendy sports cars marketed to old men.
e.g. Late model Porsche 911s and Corvettes have long topped the least risky in terms of property damage liability according to IIHS data. Why? My guess is that the only people buying these vehicles new are rich old dudes who drive them carefully on Sundays and pay attention while doing so. But despite also being a similarly powerful car, the Dodge Charger Hellcat is one of the most risky. But it appeals to a very different crowd.
I've never understood why that works. They clearly aren't slippers. They aren't sold as slippers. Nobody looks at them and says "nice slippers". Chuck Taylor importing their shoes as slippers feels fraudulent.
This is the kind of stuff that goes on for decades without anyone batting an eye at it. I welcome the Department of Government Efficiency if it can read an article like this and take action on it to generate revenue that was accounted for in revenue projections and forgotten about when it came time to collect.
Australia replaced thousands of tax code rules with a simple goods & services tax (GST), which is like a VAT. It noticeably improved the economy by reducing paperwork and overheads, especially for small to medium business.
We need more of this kind of thinking from governments instead of just layering more and more paperwork on top of existing paperwork!
Government regulations are always going to be far behind clever people. It is better to reduce government regulations and use the courts to stop abuses.
This is stupid. The law shouldn’t be written in such a way that companies can exploit silly loopholes, nor should it be written in such a way that is so invasive to normal business operations.
> This is stupid. The law shouldn’t be written in such a way that companies can exploit silly loopholes, nor should it be written in such a way that is so invasive to normal business operations.
Note that the article discusses that these are not loopholes in the sense of weird unexpected hacks, but that the original exceptions were intentionally written in response to lobbying by manufacturers betting that they can offset their lobbying costs by the associated reduction in tariffs.
Orthogonally, though, even if these were loopholes that manufacturers were wriggling through against lawmakers' intentions, then (1) I think that there is no such thing as a law that is written so that it has literally no loopholes—even to make the claim, you'd have to define what a "loophole" is, which would probably require first require a precise definition of what the intent of the law is, at which point that would be the law and any work-arounds would be not loopholes, by definition—and (2) more or less because of (1), these things are still enforced by humans; as redpanda notes (https://news.ycombinator.com/item?id=41594968), one of Ford's attempts at such skulduggery was successfully stopped by a DOJ lawsuit.
justusthane|1 year ago
> Ford imported all of its first-generation Ford Transit Connect models as "passenger vehicles" by including rear windows, rear seats, and rear seat belts. The vehicles are exported from Turkey on ships owned by Wallenius Wilhelmsen Logistics (WWL), arrive in Baltimore, and are converted back into light trucks at WWL's Vehicle Services Americas, Inc. facility by replacing rear windows with metal panels and removing the rear seats and seat belts. The removed parts are not shipped back to Turkey for reuse, but shredded and recycled in Ohio. The process exploits the loophole in the customs definition of a light truck; as cargo does not need seats with seat belts or rear windows, presence of those items automatically qualifies the vehicle as a "passenger vehicle" and exempts the vehicle from "light truck" status. The process costs Ford hundreds of dollars per van, but saves thousands in taxes. U.S. Customs and Border Protection estimated that between 2002 and 2018 the practice saved Ford $250 million in tariffs.
https://en.wikipedia.org/wiki/Chicken_tax#Circumventing_the_...
radpanda|1 year ago
0cf8612b2e1e|1 year ago
https://radiolab.org/podcast/177199-mutant-rights
Little blurb
ToucanLoucan|1 year ago
This legit made me ill and the people responsible for it, the people who permitted it, and the executives who oversaw it should all be in prison.
Suppafly|1 year ago
uberman|1 year ago
xnx|1 year ago
albert_e|1 year ago
The clickbait title could use an edit:
> The reason some Columbia shirts have a tiny pocket near waistline: lower import duties
nicbou|1 year ago
quasse|1 year ago
I can't really frame this as a global criticism either, the system has clearly evolved around the fact that importers of cheap overseas goods are constantly trying to game the rules to pay lower tariffs than competitors (see Ford with the Transit Connect).
The most frustrating part is political, and two parts:
* US politics have destabilized so much in the last decade that the rules are constantly changing, exceptions being granted and taken away, etc. This has dramatically increased the amount of brain share devoted to tariff engineering rather than product engineering.
* The tariff exclusion process (especially the recent Section 301 tariffs) is heavily lobbyist based. Small players are basically crushed while larger competitors are granted exclusions.
LaffertyDev|1 year ago
worik|1 year ago
Multiplying, too
tomcam|1 year ago
Worked out perfectly for us because our children were young, we lived at the beach, and driving them to school on the freeway was an absolute blast.
kube-system|1 year ago
It really doesn't pass the sniff test, because insurers don't need to know how many seats a car has to determine whether or not a vehicle is a sports car. The make and model is sufficient to determine this. Insurers already have a list of all known mass produced vehicles and their attributes.
Also, most insurers don't rate "sports cars" as more expensive than other cars, outright, because sports cars are not overall actually riskier to insure than non-sports cars. The risk of the driver matters quite a bit more than the car. If you look at IIHS loss data, you'll find that cheap vehicles marketed to subprime markets often have higher liability loss rates than untrendy sports cars marketed to old men.
e.g. Late model Porsche 911s and Corvettes have long topped the least risky in terms of property damage liability according to IIHS data. Why? My guess is that the only people buying these vehicles new are rich old dudes who drive them carefully on Sundays and pay attention while doing so. But despite also being a similarly powerful car, the Dodge Charger Hellcat is one of the most risky. But it appeals to a very different crowd.
lotsofpulp|1 year ago
kube-system|1 year ago
criddell|1 year ago
nosrepa|1 year ago
https://www.reuters.com/business/autos-transportation/ford-p...
imp0cat|1 year ago
https://www.youtube.com/shorts/aUnF80WY8R8
eagerpace|1 year ago
jiggawatts|1 year ago
We need more of this kind of thinking from governments instead of just layering more and more paperwork on top of existing paperwork!
raldi|1 year ago
edm0nd|1 year ago
https://www.columbia.com/p/womens-pfg-tamiami-ii-short-sleev...
which has two small pockets on the side but it seems above the waist.
they describe them as "Two zip pockets on the side seams secure small items like keys, hair ties, and lip balm."
I think the original line mentioned in OP is completely gone and now we are on the Tamiami II style atm.
samuelg123|1 year ago
silexia|1 year ago
deepfriedchokes|1 year ago
JadeNB|1 year ago
Note that the article discusses that these are not loopholes in the sense of weird unexpected hacks, but that the original exceptions were intentionally written in response to lobbying by manufacturers betting that they can offset their lobbying costs by the associated reduction in tariffs.
Orthogonally, though, even if these were loopholes that manufacturers were wriggling through against lawmakers' intentions, then (1) I think that there is no such thing as a law that is written so that it has literally no loopholes—even to make the claim, you'd have to define what a "loophole" is, which would probably require first require a precise definition of what the intent of the law is, at which point that would be the law and any work-arounds would be not loopholes, by definition—and (2) more or less because of (1), these things are still enforced by humans; as redpanda notes (https://news.ycombinator.com/item?id=41594968), one of Ford's attempts at such skulduggery was successfully stopped by a DOJ lawsuit.
aaron695|1 year ago
[deleted]