To Avoid US Tariffs, Chinese Exporters "Borrow" Vietnam? Vietnamese Customs Says It Will Investigate

Recently, influenced by the Sino US trade war, many business customs, foreign trade practitioners and freight forwarders are consulting whether they can clear customs through pshipment trade in third countries to avoid tariff risk.

The product of Sino US trade friction is the product originating from China or the United States. Before the article was passed, the analysis of goods sent to China by a third country could evade some tax sanctions.

Today, let's analyze: what will happen when Chinese goods are exported to the United States from a third country (Vietnam)?

As the United States announced tariffs on Chinese goods, some Chinese exporters began to do their best to avoid the impact of tariffs imposed by the United States, such as turning Vietnam into one.

However, the situation may change now.

A few days ago, the Vietnamese Customs was strongly directing the Customs Department to strengthen the inspection and certification of certificate of origin, so as to avoid foreign goods wearing "Made in Vietnam" labels across Europe and the United States and Japan, mainly for China's illegal export products.

In a statement issued by Vietnam customs in June 9th, the Department has found dozens of Chinese products through the "counterfeit" and "illegal pshipment" activities during the Sino US trade dispute, in order to avoid US tariffs on Chinese products.

The Vietnamese government said that more measures are being taken to prevent Chinese companies from using illegal "Vietnamese made" labels for re exports to ensure their credibility in overseas markets.

After high tariffs on Chinese goods in the United States, some Chinese companies frequently attempt to circumvent the US tariff by modifying their origin.

Vietnam said that such behavior would damage Vietnam's manufacturing brand and the authorities would take control of the phenomenon.

(Vietnam government portal screenshot)

The Vietnamese Customs Department announced on Sunday (June 9th) that textiles, fisheries, agricultural products, tiles, honey, iron, steel and plywood were the products most commonly manufactured by China's counterfeit "Vietnam made" and then exported to third countries.

The Vietnamese government website says the authorities have cracked dozens of cases.

The Customs Department has ordered its offices to examine the certificate of origin more actively to eliminate similar behaviors.

China's exports to the US have fallen sharply this year, while Vietnam's exports to the US have surged.

Although there is evidence that these growth is partly due to supply chain adjustment, analysts questioned the legitimacy of recent growth.

The fraud found by the Vietnamese government includes replacing the packaging of Chinese goods with "made in Vietnam" and obtaining the certificate of origin.

The Vietnamese government gave an example: US customs officials found that China's plywood was shipped to the United States through a Vietnamese company.

In response to similar circumstances, Vietnamese foreign minister Fan Pingming warned in the National Assembly last week that such a trick would have serious consequences if it could not be controlled.

"It will destroy Vietnamese brands and products, and it will also affect consumers, or even impose tariffs on other countries. If this happens, our economy will be damaged," the Vietnamese government website quoted Fan Pingming as saying.

Just last month, the US Treasury put Vietnam on the watch list of "currency manipulator". In other words, Vietnam may have been subject to strict scrutiny by the United States.

Vietnam will be a big winner in the Sino US trade war.

The Sino US trade war is becoming more and more intense. The United States is preparing to impose tariffs on new US $300 billion Chinese products, with a provisional tax rate of 25%, which has caused quite a wide range of turbulence in the supply chain of Chinese enterprises.

Vietnam is one of the fastest growing sources of imports in the United States.

Foreign media reported that Vietnam was one of the fastest growing countries to import from Asia in the first quarter of this year. If this speed is maintained, Vietnam will probably overtake the UK and become a larger supplier of the United States.

Data from the US Census Bureau showed that Vietnam's exports to the US increased by 40.2% in the first quarter.

If Vietnam's exports to the United States continue to grow at this rate this year, it may surpass Italy, France, Britain and India and become one of the larger source countries of the United States.

The United States is currently the largest export market in Vietnam. The industry believes that Vietnam's efforts to crack down on China's re exports are the new measures taken by the authorities to protect Vietnam's export market to the US.