Chinese exporters circumventing US tariffs, according to FT
Chinese exporters are employing various tactics to circumvent high US tariffs, including routing goods through third countries to disguise their origin, according to a report by the Financial Times, which referenced insights from trade consultants,...
TroibNews 
Chinese exporters are employing various tactics to circumvent high US tariffs, including routing goods through third countries to disguise their origin, according to a report by the Financial Times, which referenced insights from trade consultants, customs officials, and social media activity.
This approach, referred to as “place-of-origin washing,” entails redirecting goods through nations such as Malaysia, Vietnam, Thailand, and South Korea, before re-exporting them to the US with newly issued certificates of origin.
The US administration under former President Donald Trump recently enacted substantial tariffs reaching up to 145% on Chinese products, citing national security and concerns about trade imbalances. As a result, Chinese exporters are anxious that these tariffs could limit their access to a critical market.
The Financial Times noted that Chinese social media platforms are filled with advertisements promoting “place-of-origin washing.” One Malaysian salesperson remarked, “The US must know of it. It cannot get too crazy so we are controlling the amount [of orders we take].”
According to FT, officials in Malaysia, Vietnam, and Thailand are investigating these practices and have begun implementing stricter origin verification measures.
Chinese exporters generally sell goods on a “free on board” basis, which transfers liability to buyers once goods leave China, making enforcement efforts more challenging, the report added.
Another method of circumvention involves combining high-value items with lower-cost goods, enabling exporters to underreport the total value of shipments, as noted by a cross-border trade consultant. Moreover, intermediaries are allegedly providing “grey area” tariff workarounds for small and medium-sized enterprises.
In response to US measures, Beijing has accused Washington of “economic bullying” and has retaliated with 125% tariffs on all US imports while also putting export controls in place. The Chinese Commerce Ministry announced last week that it is assessing the potential for trade negotiations with the US but emphasized that Washington must demonstrate “sincerity” by lifting its tariffs if it hopes for substantial discussions.
Olivia Brown for TROIB News
This approach, referred to as “place-of-origin washing,” entails redirecting goods through nations such as Malaysia, Vietnam, Thailand, and South Korea, before re-exporting them to the US with newly issued certificates of origin.
The US administration under former President Donald Trump recently enacted substantial tariffs reaching up to 145% on Chinese products, citing national security and concerns about trade imbalances. As a result, Chinese exporters are anxious that these tariffs could limit their access to a critical market.
The Financial Times noted that Chinese social media platforms are filled with advertisements promoting “place-of-origin washing.” One Malaysian salesperson remarked, “The US must know of it. It cannot get too crazy so we are controlling the amount [of orders we take].”
According to FT, officials in Malaysia, Vietnam, and Thailand are investigating these practices and have begun implementing stricter origin verification measures.
Chinese exporters generally sell goods on a “free on board” basis, which transfers liability to buyers once goods leave China, making enforcement efforts more challenging, the report added.
Another method of circumvention involves combining high-value items with lower-cost goods, enabling exporters to underreport the total value of shipments, as noted by a cross-border trade consultant. Moreover, intermediaries are allegedly providing “grey area” tariff workarounds for small and medium-sized enterprises.
In response to US measures, Beijing has accused Washington of “economic bullying” and has retaliated with 125% tariffs on all US imports while also putting export controls in place. The Chinese Commerce Ministry announced last week that it is assessing the potential for trade negotiations with the US but emphasized that Washington must demonstrate “sincerity” by lifting its tariffs if it hopes for substantial discussions.
Olivia Brown for TROIB News
Find more stories on Business, Economy and Finance in TROIB business
