Third countries are shipping the goods while hiding their place-of-origin, the outlet has reported
Chinese exporters are using various methods to avoid steep US tariffs, including shipping goods through third countries to obscure their origin, Financial Times reported on Sunday, citing trade consultants, customs officials, and social media posts.
The practice, known as “place-of-origin washing,” involves rerouting goods through countries such as Malaysia, Vietnam, Thailand, and South Korea, and re-exporting them to the United States with new certificates of origin.
The administration of US President Donald Trump recently imposed steep tariffs of up to 145% on Chinese goods, citing national security and trade imbalance concerns. Chinese exporters fear that the tariffs will deprive them of access to one of their most important markets.
According to the outlet, Chinese social media platforms are awash with ads offering “place-of-origin washing.”
“The US must know of it,” one Malaysian salesperson has told FT. “It cannot get too crazy so we are controlling the amount [of orders we take].”
Read more Trump to hit non-US films with 100% tariffAccording to FT, authorities in Malaysia, Vietnam, and Thailand are looking into the alleged practice and are implementing measures to tighten origin checks.
Chinese exporters typically sell goods “free on board” (FOB), transferring liability to buyers once the goods leave China, which complicates enforcement efforts, the outlet added.
The other reported circumvention method is mixing high-cost items with cheaper goods, so exporters can underreport overall values of shipments, the FT quoted a cross-border trade consultant as saying. There are intermediaries who reportedly offer “grey area” tariff workarounds to small- and medium-sized enterprises.
READ MORE: China ‘assessing’ US tariff talks – Commerce Ministry
Beijing has accused Washington of “economic bullying,” retaliating with 125% duties on all US imports and implementing export controls. The Chinese Commerce Ministry said last week that it was evaluating the possibility of trade negotiations with the US but reiterated that Washington must show “sincerity” by canceling its tariffs if it wants meaningful dialogue.
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