Tuesday, September 22, 2009

How to avoid tariffs

Great piece in today's WSJ about how Ford gets around tariffs on imported vans. Ford makes vans in Turkey but cannot import them to the US without paying a 25% tariff. When the vans arrive in the US they look like passenger wagons, but the rear windows and the back seat are removed so the vehicle becomes a van for transporting cargo. The tariff on passenger wagons is only 2.5 percent, so the savings in tariffs is large enough to warrant the wasteful removal of seats and windows. Not too many jobs being saved here, except for the people who take out the windows and seats.

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