Comment by justusthane

Comment by justusthane 10 months ago

26 replies

Of course the circumvention of the "chicken tax" is probably the most well-known example of tariff engineering:

> Ford imported all of its first-generation Ford Transit Connect models as "passenger vehicles" by including rear windows, rear seats, and rear seat belts. The vehicles are exported from Turkey on ships owned by Wallenius Wilhelmsen Logistics (WWL), arrive in Baltimore, and are converted back into light trucks at WWL's Vehicle Services Americas, Inc. facility by replacing rear windows with metal panels and removing the rear seats and seat belts. The removed parts are not shipped back to Turkey for reuse, but shredded and recycled in Ohio. The process exploits the loophole in the customs definition of a light truck; as cargo does not need seats with seat belts or rear windows, presence of those items automatically qualifies the vehicle as a "passenger vehicle" and exempts the vehicle from "light truck" status. The process costs Ford hundreds of dollars per van, but saves thousands in taxes. U.S. Customs and Border Protection estimated that between 2002 and 2018 the practice saved Ford $250 million in tariffs.

https://en.wikipedia.org/wiki/Chicken_tax#Circumventing_the_...

radpanda 10 months ago

I'd also note that Ford's attempt to dodge the tariff here wasn't successful. The US DOJ sued and Ford coughed up $365 million to settle the lawsuit: https://www.freep.com/story/money/cars/ford/2024/03/11/ford-...

  • SOLAR_FIELDS 10 months ago

    A rare example of actual consequences for not following the spirit of the law, but only the letter of it

  • extraduder_ire 10 months ago

    Would it have turned out differently if they sold the vehicles as-is and included a "truck conversion kit" with the parts they used to turn them into light trucks? My thinking is based on the Subaru BRAT and its two bucket seats attached in the pickup bed.

    I'm assuming it's cheaper/easier to sell light trucks than passenger vehicles in the US. (I'm aware of the difference in emission regulations)

0cf8612b2e1e 10 months ago

There was a Radiolab story fight about dolls vs toys

https://radiolab.org/podcast/177199-mutant-rights

Little blurb

  …who noticed something interesting while looking at a book of tariff classifications. "Dolls," which represent human beings, are taxed at almost twice the rate of "toys," which represent something not human - such as robots, monsters, or demons. As soon as they read that, Sherry and Indie saw dollar signs. it just so happened that one of their clients, Marvel Comics, was importing its action figures as dolls.
  …
  So Sherry and Indie went down to the customs office with a bag of XMEN action figures to convince the US government that these mutants are NOT human.
  • throwup238 10 months ago

    As if Marvel canon wasn't confusing enough already, now customs is involved? Sheesh.

    Are we going to get a Troy Miller origin story? Bit by an improperly declared radioactive package, he dedicated his life to defending our borders from the Guild of Calamitous Import.

  • AStonesThrow 10 months ago

    Life Contradicts Art?

    • 0cf8612b2e1e 10 months ago

      That was mentioned in the show. X-men is all about wanting to be accepted as equal human beings and now the creators are going to classify them as non human to save a buck.

ToucanLoucan 10 months ago

I'm going to start compiling a list of stories to reply with when people say "environmental activists are too preachy/emotional about their work" and the Ford motor company manufacturing seats, seat belts, and windows, shipping them in vans to get out of a few thousand dollars in taxes per vehicle, and then shredding those things without them seeing a single ass in their entire existence after removing them from the vehicles for "recycling" is a great first item.

This legit made me ill and the people responsible for it, the people who permitted it, and the executives who oversaw it should all be in prison.

  • wkat4242 10 months ago

    Yes me too. It's the first thing I thought of. The "and recycled" part is clearly an afterthought/greenwashing of this horrible practice. It's important to realise too that even when fully recycling a product) and it's very doubtful to be the case here) its definitely not zero impact on the environment.

    These seats could have been sold as spares, conversion kits, even put into other new cars.

    I think this behaviour should be criminalised and I'm not taking about the tax evasion.

    • ToucanLoucan 10 months ago

      > These seats could have been sold as spares, conversion kits, even put into other new cars.

      Or even just shipped the fuck back to the factory! Like good god. If you're gonna have like a thousand seat and window combos that just get shipped back and forth between these factories, that's still wasteful, but I dunno, maybe it's purely an emotional point, but the fact that they're manufactured, fitted, shipped, and destroyed just hits so much harder.

      Doing this as a dodge this way would be shitty, but at least make an ounce of sense. Doing it the way they actually did, just making and destroying who knows how many products for literally no reason apart from skating by customs is fucking OBSCENE to me.

      Edit: A sibling comment here pointed out the FTC "came down hard" on Ford, which some quick back of napkin math translates to roughly 20% of their Q2 2023 profits to account for ten years of this tom-fuckery, covering hundreds of thousands of vans which doubtlessly contained hundreds of thousands if not millions of parts that never served a day of use and were sent to landfill, oh sorry "recycled," by Ford's partner in Ohio. Granted, more than most corporate fines I've done that kind of math for, but also incredible ROI on the part of Ford motor company. Meanwhile mother nature takes another for the team.

      I feel sick.

      Edit to edit: I maintain that as long as the "penalties" for this kind of horseshit are fines that go to the company and no further, we will never make an ounce of progress on this. I challenge anyone who feels inclined to take it on to explain to me why every Ford executive that oversaw the company while it was doing this should not be personally financially liable for it, in addition to the company itself paying fines. There is no fucking way Ford motor manufactured, shipped, and destroyed millions of van seats and windows without the executives knowing about it.

    • jordanb 10 months ago

      It's also an indictment of our legal and regulatory system that allows this interpretation to go forward (no doubt on the advice of very expensive lawyers and lobbyists hired by Ford).

      People may disagree on if the truck tariff is good policy nor not. But allowing Ford to go through with this weird kabuki dance pageant of waste when it's blatantly clear that their intent is to import a truck is absurd and corrupt.

  • d0gsg0w00f 10 months ago

    You're not mad at the person who wrote the tax code?

    Taxes are pretty arbitrary. Unless you intend to enforce the spirit rather than the letter of the law you're always going to be playing cat and mouse games. People who generate money want to keep it and people who give away money want to take it from people who have money. One will ALWAYS be a step ahead of the other.

    If you enforce the spirit of the law people call foul and stop playing the game with you.

    Don't get mad at the mice, just build better mouse traps.

    • collingreen 10 months ago

      "Don't hate the player; hate the game" is the cheaters motto.

      I've always found it weird how so many folks will shout at the top of their lungs how good it is to not have any integrity.

      • d0gsg0w00f 10 months ago

        It depends on whether it's more moral to keep a department of 5000 people employed (all paying income taxes) while avoiding import taxes or scrap the whole department because taxes make the department unprofitable.

        A business will never choose to keep a department open at a loss so it can "do it's part" in paying taxes.

        In this case the car manufacturer would just choose to not sell that make and model in the states and a whole department has no reason to exist

  • dpifke 10 months ago

    It's not just taxes. U.S. environmental and labor regulations are a big part of why Ford would prefer to manufacture vans in Turkey, burning bunker oil to ship the vans overseas and wasting energy to make and then destroy seats, seat belts, and windows.

  • aitchnyu 10 months ago

    Honda had a subsidiary to import US soy to Japan since their containers to Japan were empty.

  • jameslk 10 months ago

    > This legit made me ill and the people responsible for it, the people who permitted it, and the executives who oversaw it should all be in prison.

    In prison for what crime? Perhaps feel sick about those writing the laws, instead of those who are following them?

    • supportengineer 10 months ago

      Wasting non-renewable resources.

      • from-nibly 10 months ago

        That's not a crime as evidenced by the dumb tarrif loophole. The tragedy is the lawmakers who don't care that their laws are responsible for this.

  • eadmund 10 months ago

    I get being appalled at the waste involved. But that waste was cheaper than the customs duties they would otherwise have had to pay. In other words, all that appalling waste was more efficient than the duties would have been.

    To put it another way, I believe that you should be even more appalled at the waste that the customs duties would have imposed.

    • ToucanLoucan 10 months ago

      What on earth are you talking about? One of these things is a waste of finite resources, and the other is a "waste" of money, which is a value-storage concept, and it is a concept indeed since the vast, vast, vast majority of money doesn't actually exist beyond a number in a balance sheet.

      Yes, it would've costed Ford more to comply with the regulations by the letter and by the spirit of what was being asked of them. This should be the BARE MINIMUM we expect from members of the business community. I'm so sick of corporate apologia where some dick-headed corporation finds loopholes and ways to re-categorize things as what they definitely, categorically are not and this is not only often not criticized, but is celebrated by people! The only way this is a good thing is if you take from first principles that it's Ford's duty as an organization to duck the LAW, the result of the process of consented governance, and the flaunting of the authorities entrusted to carry out that governance, at every conceivable place to keep every last red cent they can, irrespective of the larger harmful effects it has on our world and society. If that's truly the case, then I submit that our society is not in fact for people, it is in fact, for corporations and the people just happen to live in it.

      Whether you agree with a law or a regulation or not, you are bound to respect it. If you disagree about a speed limit set on a highway, do 150 through it, and get a ticket and show up to traffic court and argue that the limit should be higher, you will pay your ticket because your opinion is irrelevant to that law. You're more than free (and I would encourage) you to advocate for changing those laws/regulations, to weigh in when public opinion is requested, to vote for politicians who support what you want to see your government do, all of that is completely, 100% above board. But once all those processes are done and the laws are written, you can't simply fucking ignore them because you don't think they're the right laws. That's anarchy, and not the fun kind.

  • flyingpenguin 10 months ago

    If it makes you feel better, there is a miniscule that the people responsible for it, the people who permitted it, and the executives who oversaw it could possibly go to prison for not doing it. fiduciary duty baby!

Suppafly 10 months ago

It's also why converse shoes have a little fuzzy later of material on the bottom, they import them as slippers instead of shoes.