• Economy
  • Investing
  • Politics
  • Sports
  • Editor’s Pick
Market Gains Updates
Economy

Goldman Sachs on tariff evasion

by January 24, 2025
by January 24, 2025

Investing.com — Goldman Sachs analysts highlighted the growing issue of tariff evasion as a significant factor in the apparent decline in U.S. imports from China, which have dropped by $240 billion since the 2018-2019 trade war. 

“Tariff evasion likely overstates this decline,” Goldman noted, adding that curbing evasion could become a focus for the second Trump administration.

According to Goldman Sachs, there are three primary methods of tariff evasion: routing goods through bystander countries (entrepot trade), underreporting the value of goods, and mislabeling goods to take advantage of lower tariff rates. 

While entrepot trade impacts bilateral trade flows, underreporting affects overall import levels, and mislabeling does not alter headline trade data.

In its research note, the bank estimates that tariff evasion has had a substantial impact. In 2023, Goldman believes $30-50 billion worth of trade was rerouted via entrepot trade, accounting for 20% of the decline in reported U.S. imports from China. 

Furthermore, they state that the gap between U.S.-reported imports from China and China-reported exports to the U.S. widened by $150 billion. Of this, Goldman attributes $80 billion to tariff evasion, split evenly between underreporting and mislabeling.

“Our estimates imply $110-130bn in total tariff evasion in 2023—of which entrepot trade accounted for $30-50bn, underreporting $40bn, and mislabeling $40bn—that reduced the bilateral US-China trade deficit by $70-90bn (entrepot rerouting + underreporting),” says Goldman.

Extrapolating these trends to a scenario with higher tariffs on Chinese imports and European autos, Goldman projects $125 billion in incremental tariff evasion and a further $80 billion reduction in the reported U.S.-China trade deficit.

 

This post appeared first on investing.com
0 comment
0
FacebookTwitterPinterestEmail

previous post
Foreign investors bet on Turkey, drawn by rate cuts, easing inflation
next post
Verizon wireless subscriber growth hits 5-yr high, profit view weak

You may also like

How Italy’s MPS went from near collapse to...

January 27, 2025

How billionaire Caltagirone could influence Italy’s banking M&A...

January 27, 2025

Markets may be repeating the mistake of 2019,...

January 27, 2025

Futures slip as investors eye China’s latest AI...

January 27, 2025

European tech shares tumble as China’s AI push...

January 27, 2025

ECB president fears loss of central bank independence

January 27, 2025

China central bank conducts 1.7 trln yuan of...

January 27, 2025

Fuji Media, rocked by sexual misconduct allegations, says...

January 27, 2025

Analysis-To weather Trump, emerging market investors look to...

January 27, 2025

In Trump’s shadow: Five Questions for the ECB

January 27, 2025
Enter Your Information Below To Receive Free Trading Ideas, Latest News And Articles.

    Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!

    Top News

    Amazon extends Prime Day discounts to 4 days...

    July 9, 2025

    Boeing delivers most airplanes since late 2023 after...

    July 9, 2025

    Waymo offers teen accounts for driverless rides

    July 8, 2025

    Is a Chinese chain’s blood orange cold brew...

    July 7, 2025

    Is a Chinese chain’s blood orange cold brew...

    July 7, 2025

    • About us
    • Contacts
    • Email Whitelisting
    • Privacy Policy
    • Terms and Conditions

    Copyright © 2025 MarketGainsUpdates.com All Rights Reserved.

    Market Gains Updates
    • Economy
    • Investing
    • Politics
    • Sports
    • Editor’s Pick