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Trade war

Hong Kong's tariff loophole flourishes in US-China trade war

Washington grows skeptical of island's autonomy as Beijing expands influence

A Hong Kong container terminal. Selling Chinese products to the U.S. via Hong Kong middlemen is growing more popular as a way to save on tariffs.   © Reuters

HONG KONG -- A once-obscure rule has made Hong Kong a hot spot for companies looking to mitigate damage from the U.S.-China trade war.

Under an American tariff scheme called the "first-sale rule," exporters sending merchandise to the U.S. through multiple locations will be charged duties based on the price of the initial transaction. 

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