The China Mail - Trump targets tariff evasion, with eye on China

USD -
AED 3.672504
AFN 63.000368
ALL 82.732897
AMD 367.370222
ANG 1.790403
AOA 917.000367
ARS 1478.086972
AUD 1.450326
AWG 1.80125
AZN 1.70397
BAM 1.716442
BBD 2.015885
BDT 123.112028
BGN 1.69088
BHD 0.377375
BIF 2972.662249
BMD 1
BND 1.295099
BOB 6.916495
BRL 5.177041
BSD 1.000921
BTN 93.946202
BWP 13.602176
BYN 2.902892
BYR 19600
BZD 2.012989
CAD 1.41895
CDF 2267.50392
CHF 0.80956
CLF 0.023471
CLP 922.497696
CNY 6.79815
CNH 6.804685
COP 3438.325508
CRC 454.429769
CUC 1
CUP 26.5
CVE 96.770372
CZK 21.30904
DJF 178.235113
DKK 6.565804
DOP 58.809075
DZD 133.424898
EGP 49.530036
ERN 15
ETB 161.36601
EUR 0.877704
FJD 2.266104
FKP 0.757679
GBP 0.757518
GEL 2.64504
GGP 0.757679
GHS 11.285269
GIP 0.757679
GMD 73.000355
GNF 8770.020624
GTQ 7.63614
GYD 209.469481
HKD 7.84255
HNL 26.780464
HRK 6.617804
HTG 130.8175
HUF 310.850388
IDR 17860.6
ILS 3.00205
IMP 0.757679
INR 94.360504
IQD 1311.158892
IRR 1375250.000352
ISK 126.490386
JEP 0.757679
JMD 157.637457
JOD 0.70904
JPY 161.75504
KES 129.518627
KGS 87.450384
KHR 4017.727851
KMF 434.00035
KPW 900.00035
KRW 1535.290383
KWD 0.30961
KYD 0.834087
KZT 485.637808
LAK 21969.371188
LBP 89630.523498
LKR 336.443021
LRD 182.31603
LSL 16.452675
LTL 2.95274
LVL 0.60489
LYD 6.42503
MAD 9.385493
MDL 17.746281
MGA 4233.621484
MKD 54.091886
MMK 2099.260826
MNT 3579.633879
MOP 8.085217
MRU 39.945588
MUR 47.250378
MVR 15.450378
MWK 1735.574181
MXN 17.504204
MYR 4.088039
MZN 63.903729
NAD 16.452675
NGN 1376.130377
NIO 36.83356
NOK 9.933039
NPR 150.313748
NZD 1.771166
OMR 0.384504
PAB 1.000921
PEN 3.41305
PGK 4.39247
PHP 61.312038
PKR 278.550353
PLN 3.76695
PYG 6109.087718
QAR 3.648427
RON 4.603104
RSD 103.014612
RUB 78.910966
RWF 1465.794901
SAR 3.758743
SBD 8.051953
SCR 14.057835
SDG 600.000339
SEK 9.73761
SGD 1.294204
SHP 0.746601
SLE 24.803667
SLL 20969.503664
SOS 572.030366
SRD 37.483038
STD 20697.981008
STN 21.501602
SVC 8.757734
SYP 110.532098
SZL 16.443021
THB 33.378038
TJS 9.263329
TMT 3.5
TND 2.966607
TOP 2.40776
TRY 46.553304
TTD 6.802405
TWD 31.859804
TZS 2632.322612
UAH 44.926675
UGX 3673.702225
UYU 40.177279
UZS 12022.46698
VES 620.752985
VND 26300
VUV 119.209429
WST 2.780882
XAF 575.678617
XAG 0.017058
XAU 0.000246
XCD 2.70255
XCG 1.803853
XDR 0.715959
XOF 575.678617
XPF 104.664531
YER 238.625037
ZAR 16.987795
ZMK 9001.203584
ZMW 18.029751
ZWL 321.999592
  • CMSC

    -0.1160

    21.93

    -0.53%

  • NGG

    -0.4100

    83.01

    -0.49%

  • GSK

    0.6100

    52.5

    +1.16%

  • RIO

    -1.3700

    93.74

    -1.46%

  • CMSD

    -0.1600

    21.77

    -0.73%

  • BCE

    -0.2800

    22.92

    -1.22%

  • RBGPF

    3.7000

    65

    +5.69%

  • BP

    -0.5900

    37.13

    -1.59%

  • AZN

    2.7300

    188.41

    +1.45%

  • RYCEF

    0.3900

    18.39

    +2.12%

  • VOD

    0.0300

    13.89

    +0.22%

  • BCC

    1.2600

    81.02

    +1.56%

  • RELX

    0.4200

    31.34

    +1.34%

  • JRI

    0.2100

    12.79

    +1.64%

  • BTI

    0.2800

    62.76

    +0.45%

Trump targets tariff evasion, with eye on China
Trump targets tariff evasion, with eye on China / Photo: © AFP/File

Trump targets tariff evasion, with eye on China

As the United States ramps up tariffs on major trading partners globally, President Donald Trump is also disrupting strategies that could be used -- by Chinese companies or others -- to circumvent them.

Text size:

Goods deemed to be "transshipped," or sent through a third country with lower export levies, will face an additional 40-percent duty under an incoming wave of Trump tariffs Thursday.

The latest tranche of "reciprocal" tariff hikes, taking aim at what Washington deems unfair trade practices, impacts dozens of economies from Taiwan to India.

The transshipment rule does not name countries, but is expected to impact China significantly given its position as a manufacturing powerhouse.

Washington likely wants to develop supply chains that are less reliant on China, analysts say, as tensions simmer between the world's two biggest economies and the US sounds the alarm on Beijing's excess industrial capacity.

But "it's a little more about the short-term effect of strengthening the tariff regime than it is about a decoupling strategy," said Josh Lipsky, chair of international economics at the Atlantic Council.

"The point is to make countries worried about it and then have them err on the side of not doing it, because they know that Trump could then jack up the tariff rates higher again," he added, referring to tariff evasion.

The possibility of a sharply higher duty is a "perpetual stick in the negotiations" with countries, said Richard Stern, a tax and budget expert at the conservative Heritage Foundation.

He told AFP that expanding penalties across the globe takes the focus away from Beijing alone.

- Alternative supplies -

Experts have noted that Vietnam was the biggest winner from supply chain diversions from China since the first Trump tariffs around 2018, when Washington and Beijing engaged in a trade war.

And Brookings Institution senior fellow Robin Brooks pointed to signs this year of significant transshipments of Chinese goods.

He noted in a June report that Chinese exports to certain Southeast Asian countries started surging "anomalously" in early 2025 as Trump threatened widespread levies.

While it is unclear if all these products end up in the United States, Brooks cast doubt on the likelihood that domestic demand in countries like Thailand and Vietnam rocketed right when Trump imposed duties.

"One purpose of the transshipment provisions is to force the development of supply chains that exclude Chinese inputs," said William Reinsch, senior adviser at the Center for Strategic and International Studies.

"The other purpose is to push back on Chinese overcapacity and force them to eat their own surpluses," he added.

But Washington's success in the latter goal depends on its ability to get other countries on board.

"The transshipment penalties are designed to encourage that," Reinsch said.

Lipsky added: "The strategy that worked in the first Trump term, to try to offshore some Chinese manufacturing to other countries like Vietnam and Mexico, is going to be a much more difficult strategy to execute now."

- China response? -

Lipsky noted that Beijing could see the transshipment clause as one targeting China on trade, "because it is."

"The question is, how China takes that in the broader context of what had been a thawing relationship between the US and China over the past two months," he added.

While both countries temporarily lowered triple-digit tariffs on each other's exports, that truce expires August 12.

The countries are in talks to potentially extend the de-escalation, although the final decision lies with Trump.

It will be tough to draw a line defining product origins, analysts say.

Customs fraud has been illegal for some time, but it remains unclear how Washington will view materials from China or elsewhere that have been significantly transformed.

The burden lies with customs authorities to identify transshipment and assess the increased duties.

"That will be difficult, particularly in countries that have close relations with China and no particular incentive to help US Customs and Border Protection," Reinsch added.

B.Chan--ThChM