Updated Jul 14, 2018

What we’re reading: The car buyers who short-circuit China tariffs

Photo: Scott Olson/Getty Images

There's big money to be made in re-selling luxury vehicles to "China's gray market," according to one man who experienced it first-hand, Travis Simpkins.

The big picture: Simpkins writes in Car and Driver that "an enterprising individual can make $10,000 this month buying luxury cars. You need a heartbeat, a driver's license, and that's about it."

"The manufacturers and their dealers have worked to design a foolproof system that will prevent you from buying a car to export to another country. Foolproof never works, though, as it underestimates the ingenuity of the fool."
— Travis Simpkins in Car and Driver
How he did it
  • He bought vehicles from a San Diego company which fronted him the money, he writes.
  • He was a straw buyer — which "typically has the shelf life and career trajectory of a Trump appointee."
  • Simpkins writes: "A single car can earn a straw buyer anywhere from $500 to $7,000 in commission. ... At the beginning of 2014, I did receive a 1099 for $30,500 from the company in San Diego."
What's happening in China
  • Simpkins writes that China's 25% tariff on new-car imports, comined "with car companies charging steeper prices for luxury vehicles there than they do in the U.S....it is easy to see how exporters can turn a profit."
  • "For example, the current base price of a new Range Rover is $88,345 here, but it starts at 1,518,000 yuan in China, which is about $240,000."
  • In 2015, Simpkins writes, "the Chinese government endorsed the gray market by creating a program that makes it easier for Chinese dealers to bring in vehicles directly from foreign markets."

Be smart: It can't last forever. Simpkins writes that in 2015, a Land Rover dealer "refused to sell my mom a vehicle...because our last name set off a DEFCON warning. I haven't bought a car for export in almost two years."

  • The risk: While Simpkins was "lyin' and buyin'," federal authorities got involved at the request of car manufacturers.
  • "Secret Service and Homeland Security agents were using civil forfeiture statutes to impound cars and freeze bank accounts."

Go deeper: Our special report on a new era of global trade wars

Go deeper

Trump administration backs Oracle in Google fight

Photo illustration: Aïda Amer/Axios. Photo via The Washington Post.

The Trump administration is siding with Oracle in the database giant's dispute with Google before the Supreme Court — a move that comes as Oracle's founder hosts a high-dollar fundraiser for the president.

Why it matters: Billions of dollars — and, Google argues, the future of software innovation — are at stake as a long-running copyright dispute between the two giant companies heads to the Supreme Court next month.

Established VCs turn to "super angels" to grow their network

Illustration: Eniola Odetunde/Axios

Thanks to companies like AngelList and Carta that make it easier than ever to set up small VC funds, a new generation of so-called “super angels” is cropping up — and established venture funds are backing them.

Why it matters: Just like the boom in scout programs a number of years ago, it’s all about the deal flow.

Scoop: Top NSC official reassigned to Energy Department amid "Anonymous" fallout

Photo: Mark Wilson/Getty Images

Deputy national security adviser Victoria Coates will be reassigned as a senior adviser to Energy Secretary Dan Brouillette, the National Security Council said Thursday — and a senior White House official said that the administration "rejects" the rumors that she is "Anonymous."

Why it matters: Coates has battled claims that she is the still-unknown Trump administration official that penned a New York Times op-ed and book critical of President Trump.