XPost: alt.fan.rush-limbaugh, alt.politics.democrats.d, or.politics
https://www.cnbc.com/2025/05/26/businesses-are-finding-a-tariff-workaround-the-first-sale-rule.html
Businesses are finding a workaround to minimize
the most significant hit from tariffs, using a
decades-old piece of legislation known as the
“first sale rule.”
Within U.S. customs law, the first sale rule
allows U.S. importers to use the price of the
first sale in a number of transactions to
calculate customs duties.
For instance, a Chinese manufacturer sells a
t-shirt to a Hong Kong vendor for $5. That Hong
Kong vendor then sells the t-shirt to a U.S.
retailer for $10. That U.S. retailer then sells
the t-shirt to consumers for $40.
Under the first sale rule, the U.S. retailer can
pay the import duty on the initial $5 price of
the good, rather than the vendor’s inflated $10,
thus stripping out the cost associated with the
middleman’s profit.
“What the rules allow you to do is use that
initial sales price from the factory to the vendor
to determine the final duty price,” Brian Gleicher,
senior lawyer and member at Miller & Chevalier
Chartered, told CNBC over the phone.
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