US Targets Buyers of China-bound Luxury Cars

Topics: International trade, Automobile, BMW Pages: 2 (680 words) Published: February 27, 2014
“ US Targets Buyers of China-Bound Luxury Cars”
—The New York Times Description of Event
Nowadays, there is a trend that US targets buyers of China-bound luxury cars for the reason of a looking to profit from growing demand in China for cars from the likes of Mercedes, BMW and Range Rover. According to The New York Times, a business man named Michael Downs has done this business for three year old, he buy new cars from dealerships in the US, then sells those vehicles to other companies, which ship them to mainland China. For example, once in China, the cars that retail for $55,000 to $75,000 in the US, after reselling can be as much as three times than those prices. According to him, “ we’re taking advantage of a legitimate arbitrage situation.” But to the federal government’s opinions, like Mr. Downs’s businesses are potentially violating customs laws and deceiving auto manufactures like BMW and Mercedes-Benz, which try to keep tight control over sales to domestic dealers and to foreign countries like China. According to The New York Times, last year, the federal prosecutors and agents with Secret Service and the Department of Homeland Security began to research and a wild range of crackdown on this “ gray market” export business, which is estimated by some to be responsible for sending the amount of 35,000 new luxury cars a year to mainland China from United States.

Connection to International Business
Although the authorities say that using straw buyers to buy cars is deceptive. In most cases, prosecutors also say that their companies that shipping the cars overseas have created misleading export documents. So from this opinion, this action belongs to exporting and importing, and among them are the tariff barriers. But I think it belongs to smuggling also. Smuggling is the illegal transportation of goods, such as out of a car across an international board, in violation applicable laws or other...
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