White House Notes Canada Biggest Enabler of Transshipped Chinese Products to U.S. Market
The White House Office of Trade and Manufacturing released an extensive report this week identifying the major nations who enable China to transship goods into the U.S market in an effort to avoid tariffs. [REPORT HERE]
Within the report several nations and regions are identified as being used by Chinese manufacturers to avoid U.S. customs and duty enforcement mechanisms. However, both Canada and Mexico are cited as primary enablers of the process.
The issue strikes at the heart of the problem identified long ago with the NAFTA agreement, and the problem only worsens when the USMCA provisions on country of origin are not enforced.
When you remove oil and lumber, the majority of Canada’s manufactured exports to the USA contain Chinese component parts and this has been the source of much friction in the current trade negotiations. The manufacturing supply chain within all free trade agreements only works when the source of component goods is accurately recorded.
CANADA – […] The report released Thursday from the Office of Trade and Manufacturing Policy — titled “The Great Transshipment Scam” and featuring a timely image of a Trojan horse on the front page — accuses China of routing their exports through third countries with more favourable U.S. tariff rates.
An estimated 40 countries, including Canada, comprise a “shadow transshipment network” used by China, the report argues.
“In plain terms, illegal transshipment is smuggling disguised as trade — fraud cloaked in paperwork — and, in truth, nothing new,” the report says, adding what has changed is the “breadth, depth, and sophistication” of China’s network. (more)
As USTR Jamieson Greer continues meeting with Canadian counterparts, the core issues are unresolved because -in part- Canada is incapable of reconciling the problem. The Canadian team have reported their intention to remain in the U.S. through the weekend hoping to continue negotiations. However, there is little optimism so long as the great pretending continues.
President Trump and USTR Greer have continually said they want Canada to go and seek additional trade agreements with other countries, in part to break the dependency on the USA and in part so that Canada can learn the lessons of reciprocity.
For several decades Canada has used their access to the U.S. market without reciprocity. In fact, one of the great admissions by former Prime Minister Justin Trudeau was openly telling President Trump their unilateral trade reliance was not something the Canadian government was capable of correcting. This led to President Trump remarking that if Canada is going to act like a state inside the U.S. economic system, then Canada should become the 51st state.
The issue is seemingly irreconcilable, and the Canadian govt continue to gaslight the Canadian people on the core issues at the heart of the matter.
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