Chinese exporters avoid US tariffs

(MENAFN) Chinese exporters are employing various tactics to avoid hefty US tariffs, including rerouting shipments through third countries to disguise their origin, according to the Financial Times. This strategy, known as “place-of-origin washing,” involves sending goods through nations like Malaysia, Vietnam, Thailand, and South Korea before re-exporting them to the United States with newly issued certificates of origin.

The US administration, under President Donald Trump, recently imposed tariffs as high as 145% on Chinese goods, citing concerns over national security and trade imbalances. This has caused fear among Chinese exporters, who are concerned about losing access to a critical market. Social media platforms in China are reportedly filled with advertisements offering “place-of-origin washing” services, with one Malaysian salesperson mentioning the importance of limiting orders to avoid drawing too much attention.

Authorities in countries like Malaysia, Vietnam, and Thailand are investigating the practice and are taking steps to strengthen origin checks. Chinese exporters typically sell goods “free on board” (FOB), meaning the liability is transferred to buyers once goods leave China, which makes enforcement challenging.

Another method reported involves mixing high-cost items with cheaper goods to lower the overall declared value of shipments. Intermediaries are said to offer “grey area” tariff workarounds for small and medium enterprises.

In response to US tariffs, China has accused the US of "economic bullying" and imposed 125% duties on all US imports, as well as export controls. China’s Ministry of Commerce has stated it is evaluating potential trade negotiations but insists that Washington must first cancel its tariffs to show a willingness for meaningful dialogue.

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