Scott Lincecum

This is a system that effectively allows importers to not pay duties if they're exporting the same thing they just imported. So let's say you import an avocado, you make guacamole, you put that in a container and you export the guacamole. You can actually get a refund on the tariff you paid on the avocado. We call that duty drawback.

This is a system that effectively allows importers to not pay duties if they're exporting the same thing they just imported. So let's say you import an avocado, you make guacamole, you put that in a container and you export the guacamole. You can actually get a refund on the tariff you paid on the avocado. We call that duty drawback.

Makes perfect sense because it's not actually entering the United States for consumption. You're actually just processing it. And we want to get that processing value, right? So that's normal.

Makes perfect sense because it's not actually entering the United States for consumption. You're actually just processing it. And we want to get that processing value, right? So that's normal.

Makes perfect sense because it's not actually entering the United States for consumption. You're actually just processing it. And we want to get that processing value, right? So that's normal.

They removed duty drawbacks. So I've heard from several people. who are in these supply chains who are like, what, what the heck, what are we even going to do?

They removed duty drawbacks. So I've heard from several people. who are in these supply chains who are like, what, what the heck, what are we even going to do?

They removed duty drawbacks. So I've heard from several people. who are in these supply chains who are like, what, what the heck, what are we even going to do?

Yeah. And you know, I'm all sanitized. So we have this question of compounding tariffs. So if you go back to the automotive example, You could have a good that gets a tariff as its starting point, gets incorporated into something, crosses again, gets another tariff, crosses again, gets another tariff.

Yeah. And you know, I'm all sanitized. So we have this question of compounding tariffs. So if you go back to the automotive example, You could have a good that gets a tariff as its starting point, gets incorporated into something, crosses again, gets another tariff, crosses again, gets another tariff.

Yeah. And you know, I'm all sanitized. So we have this question of compounding tariffs. So if you go back to the automotive example, You could have a good that gets a tariff as its starting point, gets incorporated into something, crosses again, gets another tariff, crosses again, gets another tariff.

By the end of it, you actually – because your tariffs apply – this is, sorry, really wonky – to the gross value of the product. That means – They don't apply to just the value you've added to a product in a certain place. So let's go back to our guacamole example. Even though the guacamole part of it is only half of the – avocado is half of the cost. The guacamole is the half of the cost.

By the end of it, you actually – because your tariffs apply – this is, sorry, really wonky – to the gross value of the product. That means – They don't apply to just the value you've added to a product in a certain place. So let's go back to our guacamole example. Even though the guacamole part of it is only half of the – avocado is half of the cost. The guacamole is the half of the cost.

By the end of it, you actually – because your tariffs apply – this is, sorry, really wonky – to the gross value of the product. That means – They don't apply to just the value you've added to a product in a certain place. So let's go back to our guacamole example. Even though the guacamole part of it is only half of the – avocado is half of the cost. The guacamole is the half of the cost.

Tariffs don't do that. They don't say, oh, we're only going to tariff the additional stuff you did. They just give you the full 100% of the new value of the product, right? So – You're effectively, because of this system, which makes sense, it's hard to determine value-add at the border. Nobody's going to do that.

Tariffs don't do that. They don't say, oh, we're only going to tariff the additional stuff you did. They just give you the full 100% of the new value of the product, right? So – You're effectively, because of this system, which makes sense, it's hard to determine value-add at the border. Nobody's going to do that.

Tariffs don't do that. They don't say, oh, we're only going to tariff the additional stuff you did. They just give you the full 100% of the new value of the product, right? So – You're effectively, because of this system, which makes sense, it's hard to determine value-add at the border. Nobody's going to do that.

Because of the system, though, you can end up with tariffs that are just exponentially increasing because these things cross the border so many times.

Because of the system, though, you can end up with tariffs that are just exponentially increasing because these things cross the border so many times.

Because of the system, though, you can end up with tariffs that are just exponentially increasing because these things cross the border so many times.