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US-China Trade War Intensifies in Southeast Asia

Transcript of the above video:

As the title of this video suggests, we are discussing the "Trade War" which are the tensions that have been building up in a trade context between the United States and China and some of this stuff is having some knock-on effects down here in Southeast Asia. 

Let me go ahead and quote something from a recent article in the Bangkok Post, bangkokpost.com. The article is titled: US Fines Firms Transshipping via Cambodia to Dodge Trump's China Tariffs. Quoting directly, "United States has fined several companies for exporting goods via a Chinese owned special Economic Zone in Cambodia in a bid to dodge President Donald Trump's tariffs on Chinese imports, a US Embassy Official told Reuters on Wednesday".  Quoting further, "The Department of Homeland Security has inspected and fined a number of companies for evading tariffs in the United States by routing goods through Cambodia, US Embassy spokesman Arend Zwartjes told Reuters in an e-mailed statement." So interesting. I recently did a video discussing the provisions of the US-Thai Treaty of Amity and how they can provide benefits for those looking to do business in Asia but act as a workaround for this US - Chinese Trade War, for lack of better term. As noted in this article, simply trying to dodge tariffs as discussed in this article, and I urge those watching this video to read the entire article; there is a lot more going on. I am specifically pinpointing some things as I see how they pertain to Thailand in order to provide some nuance to those who view this channel.  As I mentioned before, in the Kingdom, Americans can own their companies outright pursuant to the provisions of the US-Thai Treaty of Amity. Meanwhile, it should be noted that simply trying to create a ruse to work around tariffs is not inherently the way to do things because the tariffs have to do with the origination where the goods came from etc., etc. There is an entire analysis that goes into how you look at these things but simply, sort of for lack of better term, bouncing goods off of in this case, allegedly a special economic zone in Cambodia and then trying to bounce them in to the United States is not the greatest idea. Moreover, there has recently come to light allegations that various factories, various Chinese operators have been placing "made-in-Vietnam" stickers and labels on various items and then attempting to ship them into the United States sort of in order to circumvent if you will the tariff regime that has been imposed on certain types of Chinese goods.

The thing to take away from this video, first of all read the article. Understand this stuff is rather interesting. We haven't seen anything like this in a trade context in probably, I think it's pretty safe to say a number of years, maybe decades. That being said, the ramifications are not small. Trade between China and the United States is substantial. How this all shakes out in the near to long-term down here in Southeast Asia remains to be seen but I think overall there could be certain benefits, maybe certain disadvantages, to countries down here in South East Asia trying to trade with the United States especially in the context of their relationship with China and the sort of "trilateral" relationship if you will.

We will keep you updated on these matters. Again, as I stated this article pertained to Cambodia. At present there don't seem to be any issues on matters such as these with respect to Thailand. That being said, just be aware that trying to circumvent various tariffs can have consequences.