Comment by jenadine
8 days ago
I'm a freelance selling software services. Some of my customers are in the US. Am I affected? These tariff don't impact software, right?
Different countries have different tariff. Is there room for arbitration? In which a 3rd party business from a country with low tariff would buy a product in one of the countries with high tariff and export that to the US, taking a small cut.
Services aren't traditionally part of tariffs; tariffs apply only to physical stuff moving across borders.
That being said: I work in a services-oriented business right now "exporting" services to the U.S. and the leadership of that company is seemingly getting very worried, trying to diversify their customer base out of the U.S.
If, in the cycle of retaliatory action, they run out of ammunition with tariffs on stuff, who knows what other crazy ideas will come to the surface: Tariffs on services do come to mind, maybe restrictions around recognition/enforcement of foreign-owned intellectual property,...
Tariffs on services are much harder to enforce. There's point of entry so it's harder to check.
However, some countries have a withholding tax for services provided by foreign companies. The client is responsible for withholding the amount from any payment and paying the government. And banks play a role in the enforcement if needed.
So it can be done !
Tariffs are on goods. Unless you're physically shipping software across the border it shouldn't affect you.
You mean arbitrage, and yes, that definitely happens as a result of tariffs.
Upon import you have to declare the country of origin of the good. That's what is being tariffed and makes your arbitrage idea essentially fraud.
Usually this is happening where you import "parts" and the final assembly "the product" is "made in" and sold as "product xyx". Then the origin country of the parts do not matter.