Long, strange trip: How U.S. ethanol reaches China tariff-free
reuters.com
reuters.com
Norway has very high import duty on cured ham to protect traditional Norwegian cured ham production, which we have a fair bit of. Now, duties you have to pay when importing foreign goods into a country. However, at least in Norway, there is an exception for processing goods abroad. In that case you only pay duties on the actual work done abroad.
So, some clever folks started to transport the slaughtered, whole, pigs to Norway from Spain and import them into Norway. They were just plain (dead) pigs, and so the duty was rather low. Arriving at the destination just across the border, the truck was then told to turn around and go back to Spain. The pigs would then get cured in Spain, and then transported back to Norway.
Since the pigs used for the cured ham had already been imported into Norway the hams had thus been processed abroad, invoking the exception. Thus they only had to pay for the work done curing the ham, which was quite a lot cheaper given labor costs in Spain, as well as avoiding the higher duties.
I was told there were quite a few surprised truck drivers, being told to go right back with the same load after just having arrived in Norway. Not sure if customs cracked down on this or if they're still doing it. Not exactly good for the environment...
The original "What Colour are your bits?" essay.
The Chinese position is that US corn ethanol is a subsidised product; this is the reverse of the complaints about "dumping" solar panels.
>"But when it comes to child pornography, I think maybe Colour should make a difference - if we're going to ban it at all, it should matter where it came from. Whether any children were actually involved, who did or didn't give consent"
It's a digression, but I have to say: what is it with how people with unique ideas about copyright keep coming up with, uhh, "unique" ideas about CP?
I wonder if they sell the tanker of blended ethanol to the Chinese buyer, offload 60% of it, then buy back the remaining 40% of the load which is now clearly Chinese ethanol and head out to top off again.
Right, so the American producers can still sell tariff-free to China provided that they sell 40% less volume with increased costs. Nice loophole...
Let's say you're an American company and you have a contract to supply 1 million litres to a Chinese customer. If you want to avoid tariffs you now have to use only 600,000 litres of American ethanol where you would have used 1 million before.
It may not end up that much a drop in the end, but it clearly encourages to use less American ethanol.