Planet Money cover image

Planet Money

The trade fraud detective

Aug 23, 2024
David Rashid, CEO of Plews and Edelmann, dives into a gripping tale of trade fraud as he investigates his Chinese competitor, Qingdao Sunsong. Despite tariffs aimed at leveling the playing field, Sunsong keeps prices low, sparking Rashid's quest for answers. He uncovers possible deception involving routing Chinese products through Thailand. The journey involves forensic analyses and international detectives, highlighting the complexities of tariffs and the murky waters of trade laws. A surprising friendship blooms over hummus amidst the chaos!
26:43

Episode guests

Podcast summary created with Snipd AI

Quick takeaways

  • David Rashid's investigation into the pricing strategies of competitor Qingdao Sunsong highlighted how tariffs can be circumvented through transshipment practices.
  • The complexities of enforcing trade laws were exemplified by Rashid's challenges in getting government support despite substantial evidence of potential trade fraud.

Deep dives

David Rashid's Challenge in the Auto Parts Industry

David Rashid was tasked with improving the efficiency and competitiveness of Plus & Edelman, a manufacturer of power steering hoses facing fierce competition from the Chinese company Qingdao Sun Song. Despite various efforts to streamline operations and reduce costs, including consolidating manufacturing facilities and cutting inventory, the company continued to lose market share to Sun Song, which was offering lower prices. The situation took a turn when the Trump administration imposed tariffs on Chinese imports, leading David to believe that the tariffs would elevate Sun Song's prices and provide an opportunity for his company to regain lost business. However, contrary to expectations, Sun Song managed to maintain its low pricing even after the tariffs were increased, prompting David to investigate the underlying reasons for this anomaly.

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