Trying to Reduce China Tariffs? Don’t Fall Into the Country-of-Origin Trap

[upbeat music] You're listening to China Manufacturing Decoded from the Sophi's Group.

Hello, welcome back to China Manufacturing Decoded.

It's episode, uh, three four three today, and I was reading Renaud about, uh, tariff avoidance and transshipment on the-- about mid-August, so it's a very recent article in, uh, in the AP.

And they said that the US could be losing billions of dollars every year in tariff revenue because some goods are being routed through third countries before entering the US.

Y- we know that tariffs are kind of up in the air with the US, but it seems that the Trump administration isn't giving up on tariffs yet.

So some of our listeners, who are either American manufacturers or they are selling in, uh, the USA, are perhaps thinking, "Okay, well, if more tariffs are coming or, or tariffs might be changing, how does the country of origin and transshipment potentially affect me?" So I think this is a good time to look at the issue from a, a- an importer's perspective.

So what is-

Mm

... legitimate China plus one manufacturing? What could actually cross the sort of red line into improper tariff avoidance, which I'm sure the listeners don't wanna fall foul of? And what should you be checking before you accept a supplier's proposed solution, which might be, you know, more tempting than it, it, it, it immediately sounds, but it might not be the right thing.

So, uh, to, to start, Renaud, I've got a question.

So if I'm importing a product from China and my supplier tells me, "Don't worry about it.

We can send it through Vietnam, and you'll avoid all of the China tariffs," and I'm sure people have heard this sort of thing before.

What's the first thing you'd tell me?