CEOs Exploring Methods To Avoid Trump Tariffs As China-U.S. Trade Deal Uncertainties Loom

China US trade talks
U.S. President Donald Trump listens as he meets with China's Vice Premier Liu He in the Oval Office of the White House in Washington, U.S., January 31, 2019. (Photo: REUTERS/Jim Young)

A number of CEOs with supply chains in China are starting to think of ways that would allow their companies to avoid U.S President Donald Trump's tariffs. Some of them are even considering to move their branches to other regions.

In a phone interview with Fortune, Primex Family of Companies CEO Paul Shekoski said he is exploring legal options that could lessen the damage on his Wisconsin-based company. From his Hong Kong office, Shekoski said, "It has the potential of putting us out of business if we don't do anything."

There are reports suggesting that some firms with Chinese branches are contemplating on whether or not it is best to move to other locations amid the China-U.S. trade dispute.

For King & Spalding LLP trade lawyer, Stephen Orava, uncertainties that stem from the trade war between China and the U.S. are giving troubles to company CEOs who are struggling to keep the business afloat. "The general thing we're hearing is the frustration at the lack of certainty. That's what's causing the most anxiety," Orava pointed out.

Trump has threatened to raise tariffs on billions of Chinese goods if a trade deal is not reached by March 1. Fears on a potential no-deal ending have prompted some companies to push legal boundaries so they won't have to pay as much as 25 percent in taxes.

Primex is among the companies that started taking appropriate steps towards lessening the impact of Trump's tariffs. The technology applications group has been checking product classifications to determine if their company is among products that U.S. tariffs have a hold on.

Previous requests for tariff exclusions have been denied by the Office of U.S. Trade Representative. For Shekoski, potentially putting a company founded 75 years ago out of business is "economic harm."

One of the suggested methods to avoid tariffs amid the China-U.S. trade dispute is to alter some products. Unfortunately, Primex and some companies cannot apply this option. While the Chinese and American delegations have not reached a deal, Shekoski is leaning on moving the firm's China production to Mexico.

As CEOs of both small and big companies struggle to keep up with the potential impact of a no-deal scenario, Trump announced that he will not meet Chinese President Xi Jinping before the March 2 deadline that was previously set.

CNBC News reported that an official who requested anonymity said Xi and Trump will meet "shortly thereafter," echoing sentiments from White House officials who are against merging the China-U.S. trade war with the American government's issues with North Korea.

Trump is set to meet North Korea's Kim Jong Un by the end of February. 

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