GM Plans to Export Cars from China to the US
According to the UK Telegraph, “General Motors is planning to build cars in China and import them into the United States, a strategy that could trigger further job losses and union anger in the US.”
This is a topical example of ‘related party trade‘ – when one business is simultaneously importing and exporting among itself. Note how the headline says “export” and the tagline says “import”. GM is doing both importing and exporting. Their exported car from China is also the imported item into the US while staying within GM’s possession, which presents new challenges in keeping track of compliance. If they have a system in place, they can easily transfer the data of the exported car from their Chinese branch into the US branch’s system, which will then identify it as an import.
Hopefully, the cost savings they realize by building their products in China will assist in reviving the company from the brink of bankruptcy. Without a company, the union members won’t be employed, either. Read the complete article at the Telegraph.
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