Chinese suppliers are offering US Amazon sellers a tariff solution—but it’s not legal
Fortune
Exclusive: Chinese suppliers are offering U.S. Amazon sellers a tariff solution—but it’s not legal
President Trump's China tariffs are not just roiling the operations of Amazon sellers and other U.S. retailers big and small. They're also upending the businesses of Chinese manufacturers and distributors supplying goods to the U.S. from the other side of the world.
Now some of these suppliers are trying to keep their businesses humming by offering a simple—but illegal—solution to U.S. Amazon sellers: lying about the value of the Amazon merchandise you are importing to the U.S. in an effort to lower the duties you'll have to pay under the new slate of tariffs.
Yes, that sounds a lot like customs fraud.
In emails and WeChat messages viewed by Fortune, around a half dozen Chinese suppliers proposed such illegal workarounds to executives from a midsize household-goods brand with a large presence on Amazon.
"Many US companies use a lower value invoice to make customs clearance to reduce the tariff," one supplier wrote to the U.S. brand. "You can think about it."
"We can revise the declared value on commercial invoices to help duty costs," another said.
Some also proposed another workaround called Delivery Duty Paid or DDP shipping. In this scenario, the supplier would handle getting the goods through customs, rather than the U.S. brand, and lie about the value of the shipment essentially on the brand's behalf. The goal of this, at least in part, would be to create an artificial buffer between the U.S. seller and customs.
"Some have mentioned that they are doing this already for many of our competitors," the founder of the household-goods brand told Fortune. He requested anonymity to speak freely about the situation and to not burn longtime suppliers whose manufacturing he may still need. One of his suppliers said in a message viewed by Fortune that some China-based Amazon sellers use the same strategies to lower their custom bills.
The frenzied behind-the-scenes activity comes during a whirlwind week in which President Trump unleashed a tariff attack against countries across the world, before partially backtracking on some tariffs as the global economy threatened to collapse. But China is the exception, with most U.S. imports from the country now carrying a whopping 145% tariff. As a result, suppliers, retailers, and brands with supply chains linked to China are frenetically searching for solutions.
"I am worried for smaller importers that don't understand the legal trouble they can get into by following their suppliers' problematic advice," the founder said.
Chinese suppliers are offering US Amazon sellers a tariff solution—but it’s not legal
Fortune
Exclusive: Chinese suppliers are offering U.S. Amazon sellers a tariff solution—but it’s not legal
President Trump's China tariffs are not just roiling the operations of Amazon sellers and other U.S. retailers big and small. They're also upending the businesses of Chinese manufacturers and distributors supplying goods to the U.S. from the other side of the world.
Now some of these suppliers are trying to keep their businesses humming by offering a simple—but illegal—solution to U.S. Amazon sellers: lying about the value of the Amazon merchandise you are importing to the U.S. in an effort to lower the duties you'll have to pay under the new slate of tariffs.
Yes, that sounds a lot like customs fraud.
In emails and WeChat messages viewed by Fortune, around a half dozen Chinese suppliers proposed such illegal workarounds to executives from a midsize household-goods brand with a large presence on Amazon.
"Many US companies use a lower value invoice to make customs clearance to reduce the tariff," one supplier wrote to the U.S. brand. "You can think about it."
"We can revise the declared value on commercial invoices to help duty costs," another said.
Some also proposed another workaround called Delivery Duty Paid or DDP shipping. In this scenario, the supplier would handle getting the goods through customs, rather than the U.S. brand, and lie about the value of the shipment essentially on the brand's behalf. The goal of this, at least in part, would be to create an artificial buffer between the U.S. seller and customs.
"Some have mentioned that they are doing this already for many of our competitors," the founder of the household-goods brand told Fortune. He requested anonymity to speak freely about the situation and to not burn longtime suppliers whose manufacturing he may still need. One of his suppliers said in a message viewed by Fortune that some China-based Amazon sellers use the same strategies to lower their custom bills.
The frenzied behind-the-scenes activity comes during a whirlwind week in which President Trump unleashed a tariff attack against countries across the world, before partially backtracking on some tariffs as the global economy threatened to collapse. But China is the exception, with most U.S. imports from the country now carrying a whopping 145% tariff. As a result, suppliers, retailers, and brands with supply chains linked to China are frenetically searching for solutions.
"I am worried for smaller importers that don't understand the legal trouble they can get into by following their suppliers' problematic advice," the founder said.
0 replies
Seller_ONDn9UyWE3G3e
This IS a greedy trap being set by the Chinese and they KNOW it. Many problems arise from this:
1. The Trump Administration has already agreed to a 90 day tariff break as of today: we will pay 10%, they will pay 30%. That is not permanent by any means, but a start. We will see where this goes, for better or worse.
2. Chinese sellers do NOT respect U.S. or international intellectual property rights and are the absolute worse when it comes to trying to remedy violations. This may be changing soon with increased CBP (Customs&Border Patrol inspections and seizures)
3. When merchants fake accept invoices with substantially lower product values, it IS fraud and they are being setup for a great loss. Any fire insurance claims, product safety recalls,etc...will require valid invoices. When the merchant tries to file, all they will have is the lower value invoices which will not help them to recoup their losses. After an investigation into where the money went and how much, the fraud will be exposed for all to see.
