Chinese exporters implement inventive strategies to circumvent the high U.S. tariffs imposed by President Donald Trump based on information obtained from traders and customs officials and logistics firms.
Chinese exporters use neighboring country transit routes to perform product classifications which helps them apply reduced tariffs exceeding 145 percent. Social media ads have begun promoting what they call “place-of-origin washing.” These posts suggest that exporters can cut costs by moving goods to another Asian country before shipping them to the U.S., allowing them to clear customs under a different origin label and pay a lower duty rate.
Origin reclassification through southeast Asia
Several exporters have acknowledged sending products to nearby countries before they are shipped to the U.S. Sarah Ou, a sales agent for Baitai Lighting in Zhongshan, said sending goods through other nations can significantly reduce costs. Posts on Xiaohongshu have openly promoted using Malaysia to reclassify products as Southeast Asian in origin, specifically targeting goods such as tableware and wooden flooring.
Under U.S. rules, goods must transform substantially to qualify for a new origin legally. However, traders reportedly bypass this requirement by unloading and retagging products in countries like Malaysia, then reloading them with local paperwork. Freight forwarders claim this method allows them to obtain fresh certificates of origin from local partners.
Asian countries report increased mislabeling
Authorities in several Asian nations are seeing a rise in origin fraud. South Korea’s customs service uncovered over $21 million worth of mislabelled goods in the first quarter, many of which were Chinese products aimed at the U.S. Vietnam has urged local exporters to tighten controls over raw materials and stop issuing fake certificates. Thailand also increased inspections on outbound shipments to the U.S. earlier this year.
Logistics companies say the reclassification process remains under the radar, although U.S. officials are likely aware. One agent noted that Malaysian customs are not very strict, while another said they deliberately limit shipment volumes to avoid drawing attention.
New tactics add risk for U.S. importers
Exporters also lower tariff costs by combining expensive and cheaper products in the same shipment, then declaring the average price. A major Amazon seller warned that this approach could backfire if altered origin documents are discovered. The executive said they avoid deals where Chinese suppliers offer to handle import paperwork, citing concerns over customs violations and misdeclared values.