Chinese exporters are increasingly attempting 'origin laundering' via third countries to evade tariffs imposed on Chinese products by the administration of former U.S. President Donald Trump, the U.K. daily Financial Times (FT) reported on the 5th.
FT, citing industry insiders, noted that Chinese exporters trying to disguise their origins by going through other Asian countries like South Korea, Malaysia, and Vietnam have recently increased, reflecting concerns within the industry that access to the crucial U.S. market will be blocked due to the cumulative 145% high tariff imposed on Chinese products by the U.S. government.
Advertisements offering to assist with this 'origin laundering' are overflowing on Chinese social networking services (SNS).
One advertisement promoted, "Did the U.S. impose tariffs on Chinese goods? Transform into Southeast Asian products by going through Malaysia."
Another SNS advertisement used the phrase, "Does the U.S. control Chinese wooden flooring and tableware? Try 'origin laundering' in Malaysia for smooth customs clearance."
Salespeople from two logistics firms that assist with this circumvention of exports explained to FT that goods transported to Port Klang in Malaysia could be transferred to local containers and have tags and packaging changed. The salespeople, who requested anonymity, added that their companies are linked to local Malaysian factories that help in issuing certificates of origin.
Exporters stated that they are using these circumvention exports to avoid losing the U.S. market due to tariffs.
A representative from the lighting company Vaitai in Zhongshan City, Guangdong Province, China, said, "The tariffs from the U.S. are too high. However, after selling products to neighboring countries, passing them back to the U.S. reduces the tariff burden."
FT reported that as circumvention exports by Chinese companies increase, nations serving as 'transit points' are tightening regulations and also introduced details recently released by the Korean Customs Service.
The Korean Customs Service announced that the value of goods disguised as domestic products that were detected as being circumvented to the U.S. reached 28.5 billion won in the first quarter of this year, exceeding last year's annual detection amount of 21.7 billion won, and that most were of Chinese origin, adding that it would strengthen measures to block circumvention exports as announced on the 21st of last month.