The United States Strictly Investigates Transit Tax Avoidance Through Southeast Asia

As the most direct victim of the trade war between China and the United States, in order to avoid the high tariff, many Chinese exporters, freight forwarders and customs agents consider using the third party illegal transshipment trade through Southeast Asian countries to avoid the risk of additional tariffs imposed by the United States. This seems like a good idea, after all, the US is only imposing tariffs on us China, not on our neighbors. However, we have to tell you that the current situation may not be possible. Vietnam, Thailand and Malaysia have recently announced that they will crack down on such trade, and other ASEAN countries may follow suit to avoid the impact of US punishment on their own economies.
Vietnam’s customs authorities have found dozens of fake certificates of origin for products, as companies try to circumvent U.S. tariffs on agricultural products, textiles, building materials and steel through illegal transshipment, according to a June 9 statement. It is one of the first Asian governments to make public accusations of such wrongdoing since trade tensions between the world’s two largest economies escalated this year. The General Administration of Customs of Vietnam is vigorously guiding the customs department to strengthen the inspection and certification of the certificate of origin of goods, so as to avoid the transshipment of foreign goods with the label of “Made in Vietnam” to the US market, mainly for the transshipment of export products from China.
The US Customs and Border Protection (CBP) has issued its final positive finding against six US companies for tax evasion under the Law Enforcement and Protection Act (EAPA). According to the Kitchen Cabinet Manufacturers Association (KCMA), Uni-Tile & Marble Inc., Durian Kitchen Depot Inc., Kingway Construction and Supplies Co. Inc., Lonlas Building Supply Inc., Maika ‘i Cabinet & Stone Inc., Top Kitchen Cabinet Inc. Six U.S. importers avoided paying anti-dumping and countervailing duties by transshipping Chinese-made wooden cabinets from Malaysia. Customs and Border Protection will suspend imports of the items under investigation until these items are liquidated.
With the US government imposing tariffs on $250bn of Chinese imports and threatening to impose 25% tariffs on the remaining $300bn of Chinese goods, some exporters are “rerouting” orders to avoid the tariffs, Bloomberg said.

Post time: Oct-13-2022