Corporate Counsel Quotes Lars-Erik Hjelm on Push to Relocate Businesses from China

Lars-Erik Hjelm, an international trade partner at Akin Gump, was quoted in the Corporate Counsel story “Some Companies Are Relocating From China Over Trade Tensions, Survey Says.” The story reports on a new survey showing that some businesses are seeking to relocate their China-based supply chains in light of new trade tensions, while others are considering the relocation of a portion or all of their manufacturing out of China.

According to the article, any such move would likely lead to questions such as how can a business structure its supply and manufacturing chain to keep some of its operations in China while avoiding a “Made in China” tag and the tariffs that go along with it, which Hjelm said is “kind of subjective depending on the facts.” It is also necessary to ask, he said, whether a product is “substantially transformed in China or another country.”

Hjelm explained, “You might source auto parts and export them to Taiwan and perform some manufacturing operation of assembly. Is it now a new article of commerce that is different than the parts imported into Taiwan? For auto parts, generally a simple assembly, such as putting screws into Chinese parts and repackaging and shipping, that’s not going to be a substantial transformation.”