Economists from the Federal Reserve Bank of New York recently published a report analyzing the US-China trade deficit after the imposition of Section 301 tariffs on imports from China in 2018. They concluded that the trade deficit narrowed, but attributed a significant part of this narrowing to duty evasion on the part of Chinese exporters and/or their U.S. importers. Specifically, the authors concluded that U.S. importers artificially reduced the value of their imports from China in order to reduce the “entered value” of those goods, which was the basis on which the additional Section 301 duties were calculated. This reduction in entered value reduced the overall value of Chinese imports during the period, which in turn reduced the U.S.-China trade deficit. The authors estimate that the United States lost approximately $10 billion in duty revenue through this possible underreporting of entered value.