The U.S.-China Trade War Escalates into High-Stakes Game of Rerouting and Risk

Trade routes twist like blockchain transactions—every sanction spawns three new workarounds.

Supply Chain Chess

Manufacturers pivot faster than crypto day traders. Vietnam's ports clog. Mexico's factories hum. Taiwan's chipmakers just shrug and charge premium rates. Tariffs become mere transaction fees in this global reshuffle.

Digital Dodge

Exporters now mirror DeFi protocols—finding every loophole. Transshipments through Cambodia. Invoice magic worthy of NFT valuation reports. Customs officials chase shadows while containers change flags mid-voyage.

Risk Calculus

Companies hedge like they're trading perpetual futures. Dual sourcing? That's just diversifying your portfolio with shitcoins and blue chips. One wrong move and your supply chain gets rekt harder than a leveraged long on a Saturday night.

Finance's cynical take: Wall Street still bets on both sides—because why choose when you can collect fees from everyone panicking?

Ultimate truth: In this game, the house always wins—until the rules change again tomorrow.

China’s tariffs shake up export routes

China used to be the main outlet for U.S. scrap copper before the dispute escalated. As reported by Cryptopolitan in May, Beijing has added a 10% counter-tariff on all American imports, including copper scrap, upsetting long-standing flows.

Customs figures underline the shift. China’s intake of U.S. copper scrap slid from 39,373 metric tons in January to under 600 tons in July, the lowest monthly level since records began in 2004. China’s total scrap copper imports held NEAR 190,000 tons in July, little changed from early in the year, as other suppliers stepped in. Cargoes from Japan and Thailand have more than doubled since January, and arrivals from Canada rose 29%.

U.S. export data points in the same direction. In the second quarter, Thailand, India and Canada were the top destinations for American scrap copper.

Bloomberg reported that people familiar with the practice say these spikes suggest some transshipment. The typical method is to load U.S. scrap into containers tagged with the owner’s name and send it first to a third country; at the stop, they switch the tag to a different name and origin, then move the box on to China.

That tactic carries legal exposure.

Emmanouil Xidias, managing director at ship-broker Ifchor North America LLC, said that reloading in transit and altering origin, or declaring a stopover nation as origin before re-export, amounts to fraud. The party that changes the origin and re-exports bears liability, he said.

“Whether the buyer or the seller shoulders the risk depends on the contract terms,” Xidias said. For example, if terms cover cost of goods, insurance and freight, the risk is transferred to the buyer when goods are unloaded at their destination. “If it’s Free on Board, then the buyer takes the risk the moment the materials are loaded to the container.”

China fined copper importers over transshipment in Trump’s first term

China has moved against such activity before. Over the past decade, importers tied to illegal transshipping or origin fraud across various products have faced heavy fines and criminal cases.

During President Donald Trump’s first term, when Beijing also levied tariffs on U.S. goods, some buyers of copper scrap were fined after customs uncovered attempts to procure rerouted cargoes.

U.S. traders say they face a simple choice of keeping stock in yards or shipping abroad to raise cash. Some are opting to sell overseas, but the process is slow and secondary copper piles remain large.

Prices reflect the strain. By late July, the discount for No. 2 copper, a recycled grade used as a cheaper stand-in for primary metal, versus futures widened to the biggest gap since 2015, Fastmarkets data show.

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