Vietnam and South Korea are cracking down harder on Chinese goods that are transshipped through the two Asian countries in an attempt to evade heavier US tariffs.
Hanoi and Seoul are in talks with the Trump administration to stave off the full implementation of its currently paused “reciprocal” tariffs. As part of this, they have indicated that they will comply with a US request to support enforcement of the duties imposed on China.
Vietnamese Prime Minister Pham Minh Chinh told officials at a government meeting on April 22 to address concerns raised by the US and instructed them to put in place measures against smuggling, trade fraud, and attempts to disguise places of origin. “We need perfect preparation for the negotiations with the US,” he added.
Vietnam’s Ministry of Industry and Trade recently instructed officials who certify product origins to clamp down on counterfeits. For companies with a sudden increase in applications for Vietnam certificates of origin, compliance is to be ensured via on-site inspections of factories.
As trade frictions intensify, cases of country-of-origin fraud will increase and complicate the situation on the ground, the ministry said in its directive. The ministry appears concerned about improper transshipments of US-bound Chinese goods through Vietnam.
The US suspects that Chinese manufacturers are setting up shop in third countries to export to the US market. These operations would perform simple assembly of parts shipped from China and falsely relabel the finished products.
Vietnam is seen by the US as a main location for these activities. Vietnamese exports to the US have grown over the years. In 2024, Vietnam’s goods trade surplus with the US exceeded USD 100 billion.
In the past, operators in Vietnam have been caught engaging in country-of-origin fraud and illegal transshipments of televisions and shoes. A portion of steel products exported from Vietnam are transshipped goods, the US has found.
The Trump administration is hitting back against Southeast Asian countries suspected of transshipping exports. Last week, the US Department of Commerce announced plans for tariffs of up to 3,521% on solar cells from Vietnam, Cambodia, Thailand, and Malaysia.
It appears that Vietnam will play up its efforts to crack down on improper transshipments as it lobbies for the US to cancel tariffs.
South Korea is taking action as well. On April 21, the official Korea Customs Service announced the launch of an investigative task force on fraudulent exports.
The service said it had seized KRW 29.5 billion (USD 20.7 million) in goods mislabeled as being of South Korean origin in the first quarter. Items for the US accounted for 97% of the figure.
But if South Korea actively cooperates with the US, it risks a backlash from China. On April 21, the Chinese Ministry of Commerce slammed US efforts to use tariff negotiations to pressure countries to limit trade with China.
“China is firmly opposed to any party striking a deal at the expense of the Chinese side,” a ministry spokesperson said.
The Chinese government has warned South Korean manufacturers not to export products containing Chinese rare earth metals to US military contractors, South Korean media reported on April 22. The letters went to makers of electric vehicles, batteries, medical devices, and more.
The letters threatened the South Korean companies with trade sanctions for noncompliance, according to the reports.
This article first appeared on Nikkei Asia. It has been republished here as part of 36Kr’s ongoing partnership with Nikkei.