According to sources, officials from the U.S. Trade Representative (USTR) and the Department of the Treasury have pressured Southeast Asian countries including Vietnam, Malaysia, and Thailand through diplomatic channels, urging them to strengthen transshipment controls and impose stricter inspections and additional tariffs on the import and re-export of goods suspected of being of Chinese origin.
This move aims to maintain the U.S. leverage in China-U.S. trade negotiations and prevent China from evading the high tariffs imposed by the U.S. on Chinese goods through “backdoor channels” in Southeast Asia. Currently, Chinese goods exported to the U.S. face an average tariff rate of 25%-60%.
Per White House data, one-third of Vietnam’s exports to the U.S. are suspected of being transshipped goods from China, while the proportion for Malaysia and Thailand stands at 10%-15% of their respective exports to the U.S.
The U.S. is developing “rules of origin” standards for products from Southeast Asia, which will distinguish between local products and transshipped products based on calculations of raw materials, indirect production costs, and labor costs.
U.S. Treasury Secretary Scott Beshear stated, “If Southeast Asian countries refuse to cooperate, they will face restrictions on access to the U.S. market.”
