Mysterious pencil factory sharpens focus on tariff scams

ID 10152253 © Braendan Yong | Dreamstime.com

A saying, common among security circles, goes something along the lines: “If you build a 10ft wall, the criminal simply makes a 12ft ladder…” And so, it appears a similar game of cat and mouse is under way in the tariff war, according to this colourful report from NPR. A US investigator went to the Philippines to inspect a factory exporting pencils – one of the thousands of goods now subject to new duties – to discover dust-covered manufacturing equipment and staff simply appearing to be transferring pencils from boxes that read “Made in China”, to  one reading “Made in the Philippines”. The report says: “Mislabelling the source of products to avoid tariffs is not a new scam. But it’s likely to grow more prevalent as the trade war between the US and China drags on and tariffs are extended to nearly everything China exports. Each new brick in the president’s tariff wall brings new incentives for unscrupulous businesspeople to tunnel under.”