When studying international trade knowledge, doubts arise about the reasons for transshipment trade. Want to understand the driving factors behind goods not being directly transported but transshipped through a third country. The best answer points out that the reasons for transshipment trade include superior geographical location, trade barriers, differences in tax policies, and advantages in information resources, all of which prompt companies to choose the transshipment trade model.
Why doesn't the United States crack down on transshipment trade? What are the reasons behind it?
Resolved
Recently, I've become quite interested in international trade and learned about transshipment trade. Many people say that transshipment trade involves some operations to circumvent trade restrictions. But strangely, the United States doesn't seem to be cracking down heavily on transshipment trade. Why is that? Is it due to inadequate regulation by the US, or are there other reasons? I hope someone knowledgeable can help answer this.
Trade Expert Insights Answers
There are multiple reasons why the United States does not crack down on transshipment trade. Firstly, within a legal and compliant framework, transshipment trade is a normal component of international trade, contributing to the optimal allocation of global resources, and the US also benefits from the economic vitality brought by this form of trade. Secondly, some US companies are themselves involved in transshipment trade and can obtain more business opportunities and profits through it. A heavy crackdown would affect the interests of domestic companies. Furthermore, international trade rules are complex, and transshipment trade involves multiple parties and different countries and regions, making it difficult for the US to precisely identify and crack down, and it can easily lead to trade disputes. Finally, from a macroeconomic perspective, moderate transshipment trade helps maintain trade ecological balance and promotes the development of related service industries, such as logistics and finance, which has a positive effect on the US economy.
Therefore, the United States does not crack down on transshipment trade across the board but manages it on the premise of adhering to rules.
Transshipment trade can drive the development of related industries, such as warehousing and transportation. The US also profits from these industries, so there is no need to crack down on it.
US trade policy is more focused on overall trade balance and the competitiveness of its core industries. For a relatively flexible trade form like transshipment trade, as long as it does not seriously affect its strategic layout, the US will not easily intervene.
Transshipment trade involves multiple countries. While the US wants to regulate it, it lacks the capacity. Trade policies vary by country, making unified regulation difficult, which is why there hasn't been a strong crackdown.
Some transshipment trade in the US is to bypass sanctions and restrictions to develop the economy. If it were cracked down upon, some of its own needs would not be met, so it turns a blind eye.
Transshipment trade has diverse forms and strong concealment, making it difficult for the US to comprehensively investigate. Moreover, investigation and verification require significant human and material resources, making the cost too high.
From the perspective of international relations, rashly cracking down on transshipment trade by the US could provoke dissatisfaction from other countries and damage diplomatic relations. Weighing the options, the US chooses not to crack down.
Transshipment trade can create job opportunities for the United States. Under economic and employment pressures, the US will not easily disrupt this form of trade.
Although the US legal system is sound, the legal definition of transshipment trade is ambiguous. Without clear grounds, it is difficult to easily implement arrest actions.