Chinese exporters’ washing products to third countries to prevent Donald Trump’s rates

Unlock Free

Roula Khalaf, publisher of the FT, selects her favorite stories in this weekly newsletter.

Chinese exporters are increasing efforts to prevent the rates imposed by United States President Donald Trump by sending their goods through third countries to hide their true origin.

Chinese social media platforms are awakened with ads offering “place washing”, while a goods entry of goods China It has increased alarm to neighboring countries with problems to become staging positions for trade really destined for the United States.

The increasing use of the tactic underlines the fears of exporters that new rates up to 145 percent imposed by Trump About Chinese goods Will deprive them of access to one of their most important markets.

“The rate is too high,” said Sarah Ou, a Baitai Lighting seller, exporter based in the southern city of Zhongshan China. “(But) we can sell the goods in the neighboring countries, and then the neighboring countries sell them in the United States and reduce.”

North -American commercial laws require the goods to undergo a “substantial transformation” in a country, including the processing or manufacture that adds a significant value, to qualify as the origin of there for fare purposes.

But ads on social media platforms such as Xiahongshu offer exporters to send goods to countries such as Malaysia, where they are issued a new certificate of origin and then sent them to the United States.

“The United States has imposed rates on Chinese products? Transit through Malaysia to” transform “into southern goods -East Asian!” He said an announcement published this week in Xiaohongshu by an account with the name “Ruby – Third Country Transfer”.

“The US has set boundaries in Chinese wood and crockery?

The South Korea Customs Agency said that last month had found foreign products worth $ 29.5 million ($ 21 million) with counterfeit countries in the first quarter of this year, most of them from China and almost all for the United States.

“We are seeing a sharp increase in recent cases in which our country is used as a bypass for products to avoid different rates and restrictions due to the United States Government’s trade policy changes,” the agency said in a statement. “We have found numerous cases where the origins of Chinese products were counterfeit as Koreans.”

The Vietnam Ministry and Ministry of Commerce last month requested local trade associations, exporters and manufacturers to strengthen controls on the origins of raw materials and entry goods and to prevent counterfeit certificates.

The Thailand Foreign Trade Department also last month presented measures to strengthen the projects of origin on the products for the United States in order to prevent tariff evasion.

Egg de Baitai said, like many Chinese manufacturers, the company sent goods as “free on board”, according to which buyers took responsibility for the products once they left the port of departure, reducing the legal risk of the exporter.

“Customers just need to find ports in Guangzhou or Shenzhen, and whenever (the goods) go there, we have completed our mission … (later) is not our business,” he said.

The sellers of two logistics companies said that they could send goods to Port Klang to Malaysia, from where they would move the items to local containers and change the labels and packaging. The companies had factories in Malaysia that could help issue certificates of origin, said the vendors, who refused to be named.

“The United States must know,” one said. “You can’t go crazy so we’re controlling the amount (from the orders we take).”

“They (Malaysian customs) are not very strict,” said the other seller.

The foreign and trade ministries of China and the Malaysian government did not immediately respond to comments applications.

A consultant that advises cross -border trade companies said that the origin wash was one of the two main methods used to prevent Trump’s new taxes. The other was to mix high -cost items with cheaper goods, so exporters could falsely claim a lower global cost of shipments, said the consultant.

The owner of a consumer goods manufacturer based in the southern city of China of Dongguan said that two associations of the national industry had introduced him to intermediaries that offered “gray areas” fare solutions.

“Basically I only send to a Chinese port and take it from there,” said the owner, who added that intermediaries had offered to organize the solution for only RMB5 ($ 0.70) per kilogram sent.

“These agencies said that small and medium -sized businesses like us can make the rate better because there are always gray areas,” he said. “I hope it is true. The US is a great market: I don’t want to lose it.”

The proliferation of efforts to avoid rates has caused concern among the United States commercial partners. One of the leading executives in a seller independent of the top ten in Amazon said that they had observed cases where the origins of the shipments had been altered, risking the confiscation by the customs authorities in the United States.

The executive said they were reluctant to accept the assistance offers of their Chinese suppliers, such as that they act as a “registration import” in the United States and pay rates based on the cost of manufacturing instead of the highest purchase cost of the retail.

The executive said he was concerned that a supplier could report a false value. “You are trusting in a Chinese supplier,” they said.