As President Donald Trump intensifies tariff measures against U.S. trading partners, his administration is now zeroing in on a tactic allegedly employed by Chinese firms to circumvent these duties—by rerouting goods through third countries.
This practice, known as “transshipping,” involves shipping goods through an intermediary nation to disguise their origin and avoid higher tariffs. The U.S. has long accused Chinese companies of exploiting this loophole, especially in Southeast Asia.
“Goods transshipped to evade a higher tariff will be subject to that higher tariff,” Trump declared in formal letters sent out this week. The announcement followed the unveiling of a new trade agreement with Vietnam that includes stronger provisions against transshipment.
According to Barath Harithas, a senior fellow at the Center for Strategic and International Studies, the clause is less about Vietnam specifically and more about sending a warning across the broader Asian manufacturing network.
“It signals that any manipulation of rules of origin within Asia’s production supply chain will incur severe penalties,” he told AFP. Harithas noted that the White House appears to be delivering a dual message: sealing off a “backdoor” for Chinese goods and cautioning other Asian nations.
Vietnam, he explained, has been the primary beneficiary of Chinese supply-chain relocation since the first round of Trump’s tariffs in 2018. The administration is now determined to prevent a repeat scenario where third countries act as intermediaries for Chinese exports.
Notably, ten of the 14 countries that received Trump’s warning letters this week are located in Asia, with a majority in Southeast Asia—a region that serves as a critical junction between Chinese component manufacturers and Western consumer markets.
“Washington’s message is clear,” Harithas said. “‘Either help us monitor and curb Chinese trade evasion, or face increased duties yourselves.’”
