Business

Trump’s tariffs are bringing in serious revenue—and it’d be even higher if not for tariff dodgers costing the government $40 billion a year, Goldman Sachs says

Published

4 months ago

September 26, 2025

President Donald Trump’s tariff dodging fears are actualizing–and it could be costing the administration huge chunks of change.

Goldman Sachs warned that export data indicates increased rates of transshipments from China to the U.S. through third-party countries—a similar pattern observed during the 2018 trade war. The tariff evasion taking place today could impact more than $200 billion in U.S. imports, costing the U.S. $40 billion in tariff revenue if efforts to curb the sidestepping aren’t mitigated, bank analysts Joseph Briggs and Megan Peters said in a report.

Earlier this month, Torsten Sløk, chief economist at Apollo Global Management, estimated the Trump administration’s tariff efforts will bring in a “very significant” $350 billion in annual revenue.

As Trump imposes sweeping tariffs on countries—most recently a 100% tax on imported branded pharmaceuticals going into effect on Oct. 1—some companies have tried their best to take action to evade the levies. Many have warned that they face an impact worth billions of dollars each year. Goldman highlights the practice of transshipping, or reorganizing a supply chain to ship products from a country with lower imposed levies. Tariff dodging could also look like companies underreporting the value of goods or mislabeling products as similar goods that aren’t subject to as high of taxes.

Citing data from the United Nations Comtrade database, Goldman noted a steep increase in exports from Asian countries—particularly Vietnam—to the U.S., coinciding with a similar increase in those countries’ imports from China. While part of the correlation could be due to other countries relying more on Chinese goods as a result of tariffs, the speed of the shift could indicate transshipping, analysts said.

“Indeed, early patterns in trade data suggest some evasion of the recently implemented tariffs,” the note said.

There are also signs of foreign exporters underreporting the value of U.S. imports at the border. The discrepancy between the U.S.’s reported imports from China and China’s reported exports to the U.S. has widened by $4 billion year-to-date, Goldman Sachs said. That widening gap is in spite of the sunsetting of the de minimis exemption that allowed packages worth less than $800 to enter the U.S. without duties.

“Further, U.S. imports have been cut by larger amounts than can be plausibly explained by lower production costs, suggesting multinational companies may be avoiding tariffs by lowering reported U.S. import prices,” analysts said.

How much has the U.S. previously lost through tariff evasion?

Beyond early evidence suggesting countries may indeed be taking action to evade tariffs, evidence from Trump’s first administration—when he imposed import taxes on China—suggests the U.S. has previously lost $110 billion to $130 billion in revenue from tariff dodgers.

According to U.S. trade data cited by Goldman Sachs in a January note, the share of Chinese imports to the U.S. fell from 21.5% in 2016 to 13.5% in 2023, indicating a $240 billion reduction in China exports.

But the bank warned that this figure overstates the U.S.’s reduced reliance on Chinese exports because of tariff evasion. Goldman Sachs reported that $30 billion to $50 billion in trade was rerouted in 2023, accounting for nearly 20% of the dip in Chinese exports to the U.S. This transshipment effort only accounts for a fraction of the tariff evasion.

“Underreporting and mislabeling have likely had an even larger impact,” analysts said in the January note.

Due to reporting gaps on levied products, the gap between U.S.-reported China imports and China-reported U.S. exports widened by $150 billion. By Goldman Sachs estimations, the reporting gap was in part caused by $80 billion in tariff evasion. About $40 billion of that reporting discrepancy was due to mislabeling products as goods subject to lower tariffs.

The Trump administration, for its part, has outlined plans to crack down on transshipments, threatening an additional 40% tariff on goods shipped through a third-party country with lower levies. The Justice Department’s Office of Public Affairs announced last month the creation of the Trade Fraud Task Force to mitigate tariff evasion, as well as import smuggling.

The U.S. opened an investigation into Waaree Energies, India’s largest solar panel maker, to determine if it dodged duties bringing goods into the U.S., Bloomberg reported on Friday, citing a public notice.

Fortune Global Forum returns Oct. 26–27, 2025 in Riyadh. CEOs and global leaders will gather for a dynamic, invitation-only event shaping the future of business. Apply for an invitation.

Source link

Business

Davos 2026: reading the signals, not the headlines

Published

20 minutes ago

January 21, 2026

Jace Porter

Davos 2026: reading the signals, not the headlines | Fortune

Louisa Loran advises boards and leadership teams on transformation and long-term value creation and currently serves on the boards of Copenhagen Business School and CataCap Private Equity. At Google, Louisa launched a billion-dollar supply chain solutions business, doubled growth in a global industry vertical, and led strategic business transformation for the company’s largest customers in EMEA—working at the forefront of AI, data, and platform innovation. At Maersk, she co-authored the strategy that redefined the brand globally and doubled its share price, helping pivot the company from traditional shipping to integrated logistics. Her career began in the luxury and FMCG space with Moët Hennessy and Diageo, where she built iconic brands and led innovation at the intersection of heritage and digital transformation.

Source link

Business

Hotels allege predatory pricing, forced exclusivity in Trip.com antitrust probe

Published

51 minutes ago

January 21, 2026

Jace Porter

China’s hotels are welcoming record numbers of travelers, yet room rates are sinking—a paradox many operators blame on Trip.com Group Ltd.

For Gary Huang, running a five-room homestay in the scenic Huzhou hills near Shanghai was supposed to secure his family’s financial future. Instead, he and other hoteliers in China’s southeastern Zhejiang province say nightly rates have fallen to levels last seen more than a decade ago, as Trip.com’s frequent discount campaigns force them to cut prices simply to remain visible on China’s dominant booking platform.

“The promotion campaigns now are almost a daily routine,” said Huang, who asked to use his self-given English name out of concern of speaking out against Trip.com. “We have to constantly cut prices at least 15% to attract travelers. We have no choice but to go along with the price cuts.”

Trip.com has been central to China’s post-pandemic travel rebound, connecting millions of travelers with small operators like Huang. But for many hotels, visibility—and sometimes survival—comes at the expense of profits.

That dynamic is now at the heart of Beijing’s antitrust probe. Regulators allege Trip.com is abusing its market position, with analysts citing deflation across the sector as the government’s main concern. Interviews with lodging operators, industry groups and travel consultants describe a system where constant price-cutting and opaque policies are eroding profitability, even as demand rebounds.

Trip.com has said it’s cooperating with the government’s investigation. The company’s stock dove more 16% since the probe was announced a week ago.

Revenue per room—a key hotel metric—was flat across China in 2025, even as other Asian markets saw gains, according to Bloomberg Intelligence. Marriott International Inc.’s revenue per room in China fell 1% most of last year, while Hilton’s China room revenue trailed its regional peers.

The company controls about 56% of China’s online travel market, according to China Trading Desk, and has grown into the world’s largest booking site. Its dominance has helped fuel domestic tourism’s recovery—nearly 5 billion trips were logged in the first three quarters of 2025—but operators say the benefits are being offset by falling room yields.

“The market has developed unevenly and innovation is lacking due to monopolistic practices,” said He Shuangquan, head of the Yunnan Provincial Tourism Homestay Industry Association that represents some 7,000 operators. “The entire online travel agency sector is stagnating in a pool of dead water.”

‘Pick-one-of-two’

The broader challenge is oversupply and cautious consumer spending. In regions like Yunnan, hotel capacity has tripled since the pandemic, just as travelers tightened budgets. Consultants note that while people are traveling more, they’re spending less—leaving hotels slashing rates to fill empty beds and posting billions in losses.

For operators like Huang, the paradox is stark: the platform that delivers customers is also accelerating the race to the bottom. The complaints center around Trip.com’s “er xuan yi,” Mandarin for pick-one-of-two exclusivity arrangements—a practice that Chinese regulators have repeatedly vowed to stamp out.

Trip.com categorizes merchants into tiers with “Special Merchants” enjoying the most visibility and traffic, Yunnan Provincial Tourism’s He said. However, these top-tier merchants are typically prohibited from listing on rival platforms like Alibaba’s Fliggy, ByteDance’s Douyin or Meituan. Merchants who aren’t bound by these exclusive arrangements report being effectively compelled to offer the lowest prices on Trip.com’s online booking platform Ctrip, or risk facing a raft of measures like lowered search rankings.

Source link

Business

CEOs at Davos are buying into the agentic AI hype

Published

1 hour ago

January 21, 2026

Jace Porter

Good morning. The atmosphere here at the World Economic Forum in Davos is all about nervous excitement as the Trump administration descends on the normally quaint but currently chaotic ski town in the Alps.

President Donald Trump will be making remarks just a couple hours from now, and Fortune will be reporting live from USA House on the main promenade, with insights from government officials and chief executives during and immediately following the president’s conversation. Keep an eye on our livestream, here https://fortune.com/2026/01/21/ceos-davos-buy-into-the-agentic-ai-hype/.

Elsewhere around town, CEOs are setting their agendas for the year. Here’s what’s top of mind for a few of them:

This will actually be the year of agentic AI. The first time I heard the term “agentic AI” was at Davos last year. For all the hype around it, does the average CEO really know what it is or how to deploy it? And is AI good enough yet for agents to replace or even significantly assist human employees? The answer appears to be yes. Google Gemini head Demis Hassabis told me that Gemini 3 achieved some milestones that allow agentic AI to truly proliferate in terms of its capabilities. ServiceNow CEO Bill McDermott is also an emphatic “yes,” and says he is already using it to do things like automate his IT department (without doing layoffs, he stresses; he says he has repurposed employees instead). He thinks other CEOs are ready to do the same.

Get ready for Google glasses—for real, this time. A decade ago, Google launched its Google Glass eyewear to widespread mockery. Hassabis thinks the timing was just off; at the time there was no super app to go on the platform. AI has changed that, and Hassabis is bullish on Gemini glasses being the future form for consumer AI. Meta is betting the same thing, and OpenAI is also reportedly considering a super-device, but it doesn’t seem like either can match Gemini’s capabilities any time soon.

There’s artificial intelligence, and now there’s also “energy intelligence.” Schneider Electric CEO Olivier Blum says that nailing energy intelligence is his mission this year. By that he means he wants to capture data from various energy sources into a single “data cube,” filter it, and use agentic AI so customers can manage it all in one place to find opportunities to save power and money. “Our job is to make sure we go to the next level of energy technology to make energy more intelligent,” he told me yesterday. If he can achieve it, he sees a 7%-10% annual growth opportunity ahead.

Greenland: national panic or national security risk? I’ve heard various reactions to President Trump’s desire for a full U.S. takeover of the huge island—from outrage to vigorous support. If he does get his wish (which some here think is likely), could Europe retaliate by making life harder and more restrictive for big U.S. tech companies? That was one CEO’s consideration. Said another: “Clear-eyed people can agree that that is a national security concern. And having a national security concern is not just a U.S. concern, it’s also a NATO concern.” They were optimistic that the in-person meetings this week would help move the matter in a positive direction. You can follow all our Davos coverage—including Fortune live interviews today with Ray Dalio, Dara Khosrowshahi and more—right here.—Alyson Shontell

Contact CEO Daily via Diane Brady at diane.brady@fortune.com

Top news

The crisis CEOs can’t ignore

The annual Edelman Trust Barometer, revealed at Davos every year, shows an “insular” mindset permeating the business world, with 70% of respondents not wanting to talk to, work for, or even be in the same space with anyone with a different world view. Richard Edelman says CEOs must adopt a sense of urgency in addressing the crisis; they need to sense that “time is running out.”

The Fortune 2026 World’s Most Admired Companies list

Fortune published the 2026 World’s Most Admired Companies this week, an annual ranking in collaboration with Korn Ferry that surveys executives, directors, and analysts across a range of industries. Apple made the top of the list among leaders in all industries for the 19th year in a row—read who else made the cut.

Netflix co-CEOs boost the case for the Warner Bros. deal

Netflix co-CEOs Ted Sarandos and Greg Peters praised the streaming company’s planned acquisition of Warner Bros. Discovery during its earnings call on Tuesday, selling the deal as a boost to its streaming business and a production boost for America. Investors, however, remain worried that the deal will push Netflix away from its core business, and the stock dropped almost 5% after hours.

The markets

S&P 500 futures are up 0.19% this morning. The last session closed down 2.06%. STOXX Europe 600 was down 0.41% in early trading. The U.K.’s FTSE 100 was down 0.02% in early trading. Japan’s Nikkei 225 was down 0.41%. China’s CSI 300 was up o.09%. The South Korea KOSPI was up 0.49%. India’s NIFTY 50 was down 0.3%%. Bitcoin was at $89K.