Money Rehab with Nicole Lapin
Tariff Loophole or Not: Buying Directly From Chinese Manufacturers
Thu, 17 Apr 2025
There are tons of tariff loophole videos going viral right now, taken by people claiming to be manufacturers in China. These people say that you can bypass the tariffs through buying your favorite Chinese-made products (think Lululemon yoga pants to Louis Vuitton bags) straight from them. Today, Nicole explains if those are legit, which tariff loophole is going away and how these videos will affect consumers and investors alike.
Chapter 1: What is the main topic of this episode?
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Find a co-host at airbnb.com slash host. I'm Nicole Lappin, the only financial expert you don't need a dictionary to understand. It's time for some money rehab. So I saw something on X yesterday that stopped me scrolling in my tracks. Here's a little bit of it.
But why Hermes will charge you 38,000 USD for one bag? That's because more than 90% of the price is paid for its logo. But if you do not care about the logo, you just want the same quality, same material, you can just buy from us.
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Chapter 2: Can you buy directly from Chinese manufacturers?
Lululemon does do a little production in China, about 3% of its finished goods, but the brand maintains a full list of approved manufacturers on its website. And it doesn't include the ones that are appearing in these viral TikToks. And that guy from the Birkin clip that I shared earlier, he is not a Birkin expert either.
In the video, and I'll link it in the show notes, he really makes it seem like he is in the Birkin factory, making the very bags that the US pays an arm and a leg for. But that's just deceiving. Birkin bags are indeed made in France, not in China.
That says Hermes, the parent company of the coveted Birkin bag, does say that they get their raw materials like leather, for example, from all over the world. So it's possible that some of those raw materials are indeed from China. But the bags are definitely not assembled there.
So if this guy was really part of the Birkin supply chain at the very most, he'd be able to get you discounted raw materials, meaning you'd end up with discounted lizard skin, not the shiny entire new Birkin bag. Most likely, the real story here is that this is a trend in an attempt, albeit a very, very clever one, by counterfeiters to ride the wave of anti-tariff sentiment in the U.S.
So net-net, if you're buying a bag from the factory that claims to make Birkin bags in China, you're probably buying a knockoff. If you're cool with that, then great. You're not doing anything illegal. Possession of counterfeit items for personal use isn't a crime in the United States. But, and this is a very big but, reselling them is a totally different story. That is illegal.
Plus, importing counterfeit goods can get you in trouble with U.S. customs. In 2023 alone, US Customs seized $1.8 billion worth of counterfeit goods. So even if a TikTok video says that it's just a factory surplus or a dupe or made in the same factory, that doesn't necessarily make it legit or even legal. Plus, these videos often blur the lines between inspired by and counterfeit.
And that's a legal gray zone, one that gets even murkier when you're trying to buy directly from a foreign manufacturer online. But just to put a really, really fine point on this, if you think you're going to get essentially a Birkin bag without the logo made in the same factory in China as all the other Birkin bags, you're not.
But again, maybe that's cool with you and you're just trying to do a little tariff-free shopping through buying direct from a Chinese company and that would work.
for now because here's the thing if you're just an individual consumer typically tariffs don't apply to your purchases because most of the time when you order something directly from a chinese seller like aliexpress or timu or even listings on amazon or ebay those goods are shipped in small packages straight to your door
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Chapter 3: What are the implications of the US-China trade war?
In 2023 alone, Americans received 1 billion packages under the de minimis threshold. Meanwhile, U.S. companies are struggling, notably Forever 21, a fast fashion staple, has filed for bankruptcy twice in the last six years. And here's the reason a Forever 21 just can't compete on price with Shein, despite both companies manufacturing in China. If customers are buying from a U.S.
retailer that imports goods from China, like Forever 21, tariffs do apply to the retailer and they can pass those costs on to the consumer. But for consumers making individual purchases from Chinese companies under $800, tariffs won't affect them.
at least for another few weeks so starting may 2nd president trump is ending the de minimis exemption on goods from china if you're just a regular old consumer shopping directly from a chinese retailer all of your purchases will either have a 120 percent duty applied so if you have a 20 t-shirt declared the tariff would be 24 bucks bringing the total to 44 dollars
Or there's a flat fee alternative that will be $100 an item until June 1st and then $200 an item after that. So if you were planning on getting a new summer wardrobe from Shein, you'll want to place that order before May 2nd. Okay, so that's a lot on consumers. Let's talk about investors for a sec. Luxury investors come in two flavors.
You can be a classic retail investor and get your exposure to luxury brands through buying shares of their stock, like LVMH, for example. It's a publicly traded company that owns brands like Louis Vuitton, Moet, Tiffany, and others. Or you could be the type of investor that gets your ROI through buying the physical luxury goods and then reselling them at a higher price.
No matter which kind of investor you are, this is a problem. The end goal of these viral counterfeit videos seems to be to conflate legit manufacturing with counterfeit goods. If more consumers did start buying directly from these factories, real or fake, it could seriously disrupt the luxury industry.
Luxury brands rely on craftsmanship for sure, but like the guy said in the video, they also depend on their brand. They're not just selling a handbag, they're selling an entire story, a lifestyle, a status symbol, a logo. If consumers begin to believe that these products come from the very same factories as $50 knockoffs, the brand's value takes a hit.
That's why brands like Louis Vuitton go to such lengths to control their supply chains. It's not just about quality, it's about trust. If that trust erodes, the whole luxury house of cards could come tumbling down.
And the next year already has the potential to be tough for luxury brands because the dips in the stock market and economic uncertainty make people feel like maybe now is not the right time to drop five figures on a handbag. But here's the other side of that coin. Some consumers want to break that system. They don't care about the brand story. They just want the product.
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Chapter 4: Is it safe to buy luxury items directly from factories?
Instead of typing in the search bar, just click on the little camera icon at the right hand side of the search bar, and then you'll be prompted to upload an image. So grab that screenshot and voila, you will see in the search results if that specific image has been scraped from a brand's official website or from another seller.
If it shows up in a bunch of listings that all look shady and too similar, it's probably not legit. This one trick could save you hundreds of dollars and a lot of regret. Your financial goals feel like a big leap away, but really it's just a bunch of baby steps that together make a big difference. When you open a time checking account, you're one step closer to a better financial future.
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Chapter 5: What should consumers know about counterfeit goods?
Chapter 6: How do tariffs affect consumer choices?
Chapter 7: What are the risks of buying from viral videos?
So net-net, if you're buying a bag from the factory that claims to make Birkin bags in China, you're probably buying a knockoff. If you're cool with that, then great. You're not doing anything illegal. Possession of counterfeit items for personal use isn't a crime in the United States. But, and this is a very big but, reselling them is a totally different story. That is illegal.
Plus, importing counterfeit goods can get you in trouble with U.S. customs. In 2023 alone, US Customs seized $1.8 billion worth of counterfeit goods. So even if a TikTok video says that it's just a factory surplus or a dupe or made in the same factory, that doesn't necessarily make it legit or even legal. Plus, these videos often blur the lines between inspired by and counterfeit.
And that's a legal gray zone, one that gets even murkier when you're trying to buy directly from a foreign manufacturer online. But just to put a really, really fine point on this, if you think you're going to get essentially a Birkin bag without the logo made in the same factory in China as all the other Birkin bags, you're not.
But again, maybe that's cool with you and you're just trying to do a little tariff-free shopping through buying direct from a Chinese company and that would work.
for now because here's the thing if you're just an individual consumer typically tariffs don't apply to your purchases because most of the time when you order something directly from a chinese seller like aliexpress or timu or even listings on amazon or ebay those goods are shipped in small packages straight to your door
As long as the total value of that package is under $800, it's covered by something called the de minimis exemption. That means no tariffs, no customs duties, no import taxes. This is how Chinese companies like Xi'an and Timu have been able to keep their prices dirt cheap, and these prices have been hugely attractive for US consumers.
In 2023 alone, Americans received 1 billion packages under the de minimis threshold. Meanwhile, U.S. companies are struggling, notably Forever 21, a fast fashion staple, has filed for bankruptcy twice in the last six years. And here's the reason a Forever 21 just can't compete on price with Shein, despite both companies manufacturing in China. If customers are buying from a U.S.
retailer that imports goods from China, like Forever 21, tariffs do apply to the retailer and they can pass those costs on to the consumer. But for consumers making individual purchases from Chinese companies under $800, tariffs won't affect them.
at least for another few weeks so starting may 2nd president trump is ending the de minimis exemption on goods from china if you're just a regular old consumer shopping directly from a chinese retailer all of your purchases will either have a 120 percent duty applied so if you have a 20 t-shirt declared the tariff would be 24 bucks bringing the total to 44 dollars
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