Offshore byers/sellers to circumvent tariffs

Companies and individuals often use various offshore strategies to circumvent tariffs, some legal and others fraudulent or risky. These tactics range from utilizing third-country transshipment and offshore registration, to value under-declaration and misclassification of goods. Authorities actively monitor and penalize illegal circumvention, but enforcement challenges persist, especially with complex global supply chains.ecomcrew+2

Common Offshore Circumvention Methods

• Transshipment Through Third Countries: Goods are shipped from a high-tariff country to an intermediary country and then on to the destination, sometimes with repackaging or minor processing to falsely claim new origin.dynamisllp+2

• Offshore Registration and Flagging: For large assets like yachts, buyers register vessels in offshore nations such as the Cayman Islands or Marshall Islands, using regulatory loopholes to avoid import tariffs by entering as non-imported, visiting vessels.cnbc+1

• Value Under-Declaration: Sellers understate the value of goods on customs forms to reduce the tariff owed, exploiting limited oversight in some jurisdictions.independent+1

• Misclassification and Origin Fraud: Products are deliberately mislabeled with incorrect Harmonized Tariff Schedule (HTS) codes or false countries of origin, qualifying them for lower rates or exemptions.ecomcrew+2

• Bonded Warehouses and Duty Drawback: Importers use bonded warehouses to temporarily store goods, deferring entrance to the domestic market until tariff conditions change, or reclaim duties on exported goods.ecorn+2

Legal and Enforcement Implications

• Many of these tactics, such as simple transshipment without substantial transformation or origin fraud, are illegal and subject to severe penalties including triple damages and criminal prosecution.bloomberg+1

• Legal strategies, like product redesign (tariff engineering), use of legitimate free-trade agreements, and proper use of customs exceptions (e.g., for bonded goods), remain available but require careful compliance.netsuite+1

• Customs agencies are increasingly vigilant regarding false declarations and origin fraud, especially with rising tariffs in sectors such as textiles, electronics, and steel.dynamisllp+1

Considerations for Buyers and Sellers

• Large multinational companies are typically better equipped to navigate or exploit complex tariff environments compared to small businesses due to legal resources and supply chain flexibility.netsuite+1

• Buyers and sellers considering offshore strategies must weigh the potential savings against legal, reputational, and logistical risks.independent+1

In summary, while a range of offshore methods exists to circumvent tariffs—most revolving around shipping routes, product registration, or document fraud—the risks and enforcement are growing as governments respond to ongoing tariff evasion scandals.ecomcrew+2

1. https://www.ecomcrew.com/illegal-ways-avoid-tariffs/
2. https://www.dynamisllp.com/knowledge/tariff-increases-customs-fraud-enforcement-risks
3. https://www.netsuite.com/portal/resource/articles/business-strategy/tariff-mitigation-strategies.shtml
4. https://www.reddit.com/r/NoStupidQuestions/comments/1jvb6k6/circumvent_tariffs_through_another_country/
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6. https://www.cnbc.com/2025/07/31/europe-yacht-buyers-tariffs.html
7. https://bviyachtsales.com/whats-going-on-with-the-new-trump-tariffs-on-imported-yachts-what-owners-need-to-know/
8. https://www.independent.co.uk/news/world/americas/us-politics/trump-tariff-evasion-tricks-b2758860.html
9. https://www.ecorn.agency/blog/avoid-trump-tariffs
10. https://www.cnn.com/2025/05/06/economy/us-businesses-avoiding-tariffs
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12. https://www.bloomberg.com/news/articles/2025-04-23/-made-in-malaysia-sellers-bombarded-with-ways-to-evade-china-tariffs
13. https://harris-sliwoski.com/chinalawblog/the-guide-for-legally-avoiding-todays-and-tomorrows-u-s-tariffs/
14. https://www.npr.org/2025/03/07/nx-s1-5318785/tariff-dodging-companies-exemptions-engineering
15. https://www.cbc.ca/news/canada/tariffs-trump-cusma-compliance-explained-1.7590517
16. https://www.youtube.com/watch?v=h5P8WHBrQvo
17. https://www.cbsnews.com/news/trump-tariffs-de-minimis-rule-end-online-shopping/
18. https://www.calfee.com/blog/scary-tale-of-tariff-avoidance-scam
19. https://www.wita.org/blogs/tariffs-and-the-making-of-offshore-market/