In what can only be described as the world’s most elaborate game of economic hot potato, the US government has finally noticed that China has been shipping goods through dozens of third-party countries to avoid tariffs. Turns out, when you make something expensive to import directly, people just find a longer route. Who knew?
The report reads like a detective finally solving a crime that everyone else watched happen in real time. China routes goods through Vietnam, Thailand, Mexico, and other countries with friendlier tariff arrangements, then those countries re-export to the US as if they made the stuff themselves. It is the supply-chain equivalent of having your friend order pizza for you because they have a better discount code.
The beautiful part is that this is not even new. Tariff arbitrage—finding the cheapest legal way to move goods across borders—is what international trade actually is. It is the entire reason supply chains exist. Yet somehow, every administration acts shocked when companies optimize for cost instead of patriotism.
The real comedy is that the US now has to figure out whether to tariff the countries doing the tariff dodging, which would just create another layer of dodging. It is turtles all the way down, except the turtles are shipping containers and everyone is pretending they did not see this coming.
So here is what matters: if you buy imported goods, prices stay weird for longer because solving this requires either negotiating with a dozen countries or accepting that tariffs mostly just shuffle where stuff gets made. Neither happens fast.