Duties, exporters of China circumvent US rates through third countries: alarm for the “washing” of origin

Chinese exporters try to escape the duties imposed by Trump selling their products to the US through third countries to hide their true origin and thus avoid paying record fees. It is, explains the Financial Times, of a technique of “washing” that, however, is alarming the neighboring countries for the influx of Beijing goods, as they fear becoming a traffic point for goods intended for reality for the United States. The growing use of this trick highlights the fear of exporters that new duties, up to 145%, imposed by Trump on Chinese products, deprives them of access to one of their most important markets. For this reason, they try to sell goods to neighboring countries, which in turn resell them to the United States, thus avoiding the payment of high tasks.

US commercial laws require goods to undergo a “substantial transformation” in a country, which usually includes processing or production that adds a significant value to be considered originally from this country for tariff purposes. But social media ads such as Xiaohonghu, Note FT investigation, offer exporters to send goods to countries such as Malaysia, where a new certificate of origin will be issued and sent to the United States. The South Korean customs agency declared last month that it identified the first quarter of this year in foreign products for a value of 29.5 billion won ($ 21 million) with counterfeit countries, most of them from China and almost all intended for the United States.

Last month, the Vietnam Ministry of Industry and Commerce invited local business associations, exporters and producers to strengthen controls on the origin of intermediates and intermediate assets and prevent the release of counterfeit certificates. The Thailand Foreign Trade Department also presented measures last month to strengthen controls on the origin of products for the United States in order to prevent evasion of duties. The sellers of two logistics companies said they could send the goods to the Klang port in Malaysia, where they would transfer the items to local containers and exchanged the labels and packaging. In a statement issued after publication, the Malaysian Ministry for Investments, Commerce and Industry said the country is “committed to supporting the integrity of international business practices” and “considers any attempt to avoid tasks through incorrect or false statements related to the value or origin of goods, as a serious crime.” “If these reports are founded, we will start an investigation and take the necessary measures, in collaboration with our customs authorities and the US authorities,” he added. Giving false origin to goods is just one of the two main methods used to escape the new functions of Trump. Another consists of mixing expensive articles with cheaper goods so that exporters can declare a general cost of lower shipments.