Question about the potential sale of HBC to Chinese billionaire?

[JackBurton]

Hey gang

I have a question for people way smarter than me in economics.

First, the story https://www.thestar.com/business/a-...cle_ab83e475-7de7-4264-b098-f81bbb12a98d.html

My question is this (regarding the tariffs that are being slapped on everything, everywhere): if this Chinese billionaire buys HBC, can that company skirt all import taxes into Canada from china since it’s a Canadian company?

If she has a direct pipeline from manufacturing in china right to market in Canada and other countries that are allied with us, is that an end run around all the tariffs?

Legit answers only, please. I’m in no mood to suffer fools today.

thank you.

 

[bazokajoe]

It depends if Canada has tariffs with China made products.

 

[JackBurton]

It depends if Canada has tariffs with China made products.

Exactly. What if we have very low tariffs on china? Does they mean we can be the middle man to other countries? What if Chinese manufactured goods come into Canada then get sold to the US, avoiding the 57% tariffs the US has imposed on china and just eating the 10-25% tariff on goods from Canada entering the US?

 

[bazokajoe]

Exactly. What if we have very low tariffs on china? Does they mean we can be the middle man to other countries? What if Chinese manufactured goods come into Canada then get sold to the US, avoiding the 57% tariffs the US has imposed on china and just eating the 10-25% tariff on goods from Canada entering the US?

Honestly I don't know.

 

[JohnHenry]

Tariffs are typically based on country of origin, not necessarily the country exporting.

 

[DesRicardo]

Simple answer, no.

 

[SchlongConery]

Simple answer, no.

Correct.

Laundering products through a third country is illegal.

 

[JackBurton]

But h

Correct.

Laundering products through a third country is illegal.

But how would it be illegal?

Companies buy from a supplier overseas and slap their own branding on it all the time.

How is this any different they what P-mall does, just scaled up?

 

[SchlongConery]

But h

But how would it be illegal?

Companies buy from a supplier overseas and slap their own branding on it all the time.

How is this any different they what P-mall does, just scaled up?

When an exporter certifies that a Product is Made in Canada for Customs purposes, that is a legal declaration. if you falsify a Customs form you can find yourself in big trouble.

There are provisions for "Made in Canada with some ingredients or components sourced in X, Y & China" for example. Then you have to provide a breakdown of components incorporated both in terms of % of content as well as dollar value.

On many products you have to have a manufacturer's certificate of origin to even get your products through is they contain foreign ingredients etc.

 

[SchlongConery]

But h

But how would it be illegal?

Companies buy from a supplier overseas and slap their own branding on it all the time.

How is this any different they what P-mall does, just scaled up?

As for Pacific Mall. That is simply a cesspool of criminals who are violating intellectual property laws and customs laws for importing counterfeit goods.

Problem is that the brands have to hire detectives and lawyers to enforce their IP rights. The cops know this place traffics counterfeit and stolen goods and, frankly, don't give a shit.

Just because something is illegal doesn't stop people from trying to get away with things.

 

[JackBurton]

When an exporter certifies that a Product is Made in Canada for Customs purposes, that is a legal declaration. if you falsify a Customs form you can find yourself in big trouble.

There are provisions for "Made in Canada with some ingredients or components sourced in X, Y & China" for example. Then you have to provide a breakdown of components incorporated both in terms of % of content as well as dollar value.

On many products you have to have a manufacturer's certificate of origin to even get your products through is they contain foreign ingredients etc.

Ok, but it doesn’t need to say made in Canada. Just slapping the HBC logo on it with no other info is just fine?

 

[nottyboi]

Hey gang

I have a question for people way smarter than me in economics.

First, the story https://www.thestar.com/business/a-...cle_ab83e475-7de7-4264-b098-f81bbb12a98d.html

My question is this (regarding the tariffs that are being slapped on everything, everywhere): if this Chinese billionaire buys HBC, can that company skirt all import taxes into Canada from china since it’s a Canadian company?

If she has a direct pipeline from manufacturing in china right to market in Canada and other countries that are allied with us, is that an end run around all the tariffs?

Legit answers only, please. I’m in no mood to suffer fools today.

thank you.

NO. Canadian companies do not get tariff exemptions.

 

[nottyboi]

Correct.

Laundering products through a third country is illegal.

A vast amount of it happens in Vietnam and other nations close to China

 

[Jubee]

Article without the pay wall.

Island billionaire says she wants to acquire ‘dozens’ of Hudson’s Bay stores

The deadline for declaring the intention to purchase or invest in Hudson’s Bay’s remaining assets and intellectual properties is Monday, with actual bids due at the end of the month.

www.timescolonist.com

 

[bazokajoe]

If it was legal those penguins could really clean up.

 

[JackBurton]

NO. Canadian companies do not get tariff exemptions.

I never mentioned an exemption. I said China faces a 57% tariff into the states, if it comes from Canada it’s only 25%. Seems like a smart business move to have a pipeline from china to Canada to the US if you are moving millions of dollars in merch.

 

[DesRicardo]

I never mentioned an exemption. I said China faces a 57% tariff into the states, if it comes from Canada it’s only 25%. Seems like a smart business move to have a pipeline from china to Canada to the US if you are moving millions of dollars in merch.

What you are suggesting is illegal. This would be a shell company for the purpose of by-passing a tariff.

Now let me know ask you a question, What will you tell US-Customs when they inspect your truck load of inventory and the boxes say "Made in China" but your paperwork says from Canada?

 

[JackBurton]

What you are suggesting is illegal. This would be a shell company for the purpose of by-passing a tariff.

Now let me know ask you a question, What will you tell US-Customs when they inspect your truck load of inventory and the boxes say "Made in China" but your paperwork say from Canada?

Oh I don’t know the answer to that. That’s why I asked the question.

just seems like a very rich billions from a country that makes most of the things we use in North America, taking over a Canadian heritage brand in the middle of a global meltdown seems weirdly convenient

 

[DesRicardo]

Oh I don’t know the answer to that. That’s why I asked the question.

just seems like a very rich billions from a country that makes most of the things we use in North America, taking over a Canadian heritage brand in the middle of a global meltdown seems weirdly convenient

Well, jump in a time machine and tell that to the politicians that sold Canada out in the 80s and 90s.

 

[Cardioguy]

Legally, relocating a product from China to another country (Vietnam for instance) or even relocating and doing the final assembly in another country does not produce tariff exemptions or change the country of origin.
A product must undergo what is commonly referred to as "fundamental transformation" to avoid the said tariff. Such as a chemical reaction that creates a new compound.
For instance after the Ukraine invasion, Canada and the USA agreed to an embargo on Russian oil as did many other nations. We cannot buy Russian oil.
However, India which happens to be one of the largest refiners of oil in the world did not sanction Russian oil.
So Russian oil goes to India to be refined which qualifies as "substantial transformation". One of those refined products is gasoline which in turn is sold legally around the world bc it is now an Indian product rather than Russian.
There is a good probability that many vehicles in North America are using fuel that originated at least in part in Russia, right now!

Having said that illegal transshipment has been a thriving industry forever and will balloon in the current climate.
Even with the intense push over the last decade for large organizations to adopt a China plus one strategy (and hundreds have), it is going to become a much larger problem.
It has been and always will be a cat-and-mouse game with manufacturers and agencies like the CBP.
I doubt it is a coincidence that President Xi is visiting Vietnam, Cambodia and Malaysia in the coming days.