Chinese Exporters Dodge US Tariffs With Fake ‘Made In Vietnam’ Tags

by | Jun 10, 2019 | Headline News | 21 comments

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    This article was originally published by Tyler Durden at ZeroHedge.

    Chinese exporters who are hoping to evade tariffs as high as 25% on some of their goods are hoping to capitalize on the explosion of exports from Vietnam to the US – and not by simply and legally routing their products through Vietnam as a legal transshipment point, but by masking their true origins, provoking fears that the US might seek to punish the Vietnamese for failing to crack down on this type of fraud.

    On Sunday, Vietnam released a statement pledging to increase penalties on trade-related fraud. It was one of the first times an Asian government has ever alleged such misbehavior and comes after Vietnamese authorities found dozens of fake product origin certificates and illegal transfers presumably by Chinese companies trying to sidestep US tariffs on everything from agriculture to textiles, according to Bloomberg.

    The crackdown comes as Vietnam has emerged as one of the fastest growing sources of American imports.

    Vietnam

    One member of the Vietnamese national assembly’s economic committee said the government is worried it could provoke the wrath of the US if it doesn’t crack down on the flow of mislabeled Chinese products. The sheer magnitude of the jump in Vietnamese exports has prompted some to question how much of this could possibly be due to legitimate commerce.

    Some say that a “cottage industry” for circumventing Vietnamese tariffs has emerged out of nowhere.

    The Southeast Asian country’s reported shipments to the U.S. have jumped this year as China’s have slumped. While there’s evidence that some of those gains are due to shifting supply chains, analysts have questioned how much of the recent surge is legitimate.

    Fraudulent cases discovered by Vietnam’s government include packaging on Chinese goods being changed to say “Made in Vietnam” before certificates of origin are processed. The government cited an example of U.S. customs officials uncovering Chinese plywood being shipped to America through a Vietnamese company.

    “A cottage industry for circumventing U.S. tariffs will likely bloom, given the high tariff rates and huge potential profit,” said Chua Hak Bin, a senior economist at Maybank Kim Eng Research Pte. in Singapore. “ASEAN governments will likely crackdown on such re-routing for fear of being seen as a backdoor,” Chua said, referring to the Association of Southeast Asian Nations.

    And while the number of ‘questionable’ shipments will always be ‘relatively small’, “there will always be leakages and workarounds to avoid tariffs. But we do not see it as a widespread phenomenon.

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      21 Comments

      1. Anonymous

        Phuck Viet Nam

      2. JRS

        So, instead of bringing back jobs to the US, corporations will shift production to other countries where labor is cheap. Mentioned this when tariffs were first proposed. Both Bush and Obama tried tariffs and it didn’t work to bring jobs back. Tariffs won’t work as long as there are cheaper work forces and cheaper currencies anywhere in the world unless you tariff them all. In a CNBC interview this morning Trump admitted the manufacturing is going from China to other countries. He claimed this was good as it showed tariffs on China worked. Shows me that tariffs are just a hammer to smash China’ economy with because they are becoming too strong, and not really being used as a tool to return jobs to the US. He keeps stating that tariffs are paid by China…but they’re not. Peter Navarro is behind the “smash China” project. He has always considered China the enemy, if you’ve ever seen any of his presentations…and it’s not about trade with him.

        Only if Americans are willing to work for less than far eastern countries, or give up the reserve currency, will jobs return. I don’t see that happening.

        It’s called Triffin’s Dilemma. It shows that the country with the reserve currency must always run a trade deficit by keeping a strong currency in order to keep it in demand worldwide. This is what happens when the world runs a system with no limits on currency creation. In order to keep the reserve currency you need to keep it stronger than all the others. This makes exports from weaker currency markets cheaper than ones made here. The reserve currency also will buy more goods than other market currencies. You either have the reserve currency and very little manufacturing or you have a weaker currency and attract those jobs. No other choice with unbacked fiat systems.

        Here’s this again:

        Progression of an economy:

        Agrarian economy ==>
        Industrial economy ==>
        Service economy ==>
        Collapse

      3. Him

        Good presentation there, JRS. I would like to add that cheating on product labels has been going on for a long time. Sneaky foreigners.

      4. JRS

        Take the I-phone as an example. How do you square this circle through Chinese tariffs? I often hear people say Apple should stop making I-phones in China and start making them here.

        China only assembles the I-phone. All the parts are sourced from other countries…none are manufactured in China. China gets $8.46 (2014) to assemble each I-phone but it gets labelled as a Chinese export. Apple doesn’t manufacture anything. It’s outsourced to a cheap global supply chain. They control marketing and distribution…the most lucrative part of the I-phone. They will just shift assembly to another cheap country should tariffs affect sales.

        It’s a global supply chain now, not a country specific one anymore. Hard to tariff the whole world without crashing the economy.

      5. Him

        It is nearly impossible to form an opinion on good info, when there is so little accurate info out there. Example. Foreign aid. It’s huge. But is it foreign aid or not? I was listening to my car radio many years ago. The guest on the news was a women who was in charge of regulating or overseeing foreign aid. She said that 90% of all foreign aid dollars were spent in the US! How is this possible? Apparently US manufacturers have items that they can’t sell. So their lobbyists get the government to buy the stuff and “donate it” overseas. Who knew?!! In this country, that makes sense. I’m not surprised.

        • Kevin2

          Him

          Foreign aid is actually foreign graft. We hear that, “its a shame that our foreign aid doesn’t make it down to the people”. Newsflash, its not intended to. It’s intended to keep our chosen regime in power in essence a bribe. If they’re benevolent so be it, if not that’s also ok. Such funds filtering back into the pockets of business is fine too.

          • Frank Thoughts

            You are totally correct. I worked in aid for many years and 99% is pure BS. They pick a token black woman to front the projects but you can be damn sure most of the aid money goes to government officials first, before it is shipped back out of the country to Switzerland, Antigua, Dominica etc.

            And you are right it is just a sweetener for allies and vassal states.

            The one good thing aid does is keep the world’s flesh pots well stocked with prime p#ssy so you don’t have to have sex with that land whale slouched on your couch back home.

      6. aljamo

        This quote fits here, “The establishment of a central bank is 90% of communing a nation.”

      7. aljamo

        Rather communizing a nation.

      8. The Deplorable Renegade

        Leave it to someone like the chicoms to pull a stunt like this.

      9. george

        Fruit of the Loom manufactured by Won Long Dong .

      10. Seminole Wind

        Dem sneaky, yellow Zipper Heads. Couldn’t trust’m when I was stationed in the Republic of South Vietnam in 1970, still can’t .

        Actually many of them were wonderful/fine soldiers and friends. The Communist however, were/are bastards

        • Plan twice, prep once

          Marxism i.e. Communism or socialism is a plague on mankind. It brings out the worst in people and always devolves into totalitarianism. Be it China, Venezuela or any other communist state, mob bosses always become drunk on power and squeeze until even the criminals can’t live there because the government already took everything of value.

          • Seminole Wind

            Sure. Almost everything used against us in Vietnam was made by our “friends” in China. Iran isn’t much better either, sending troops and IED’s to kill our guys in The Sand Box.

      11. Honeypot

        Just go out of your way to buy products locally made whenever possible. It’s a little extra work to see if a product you need is made in your own city, county, State, or at least this Country.

        But, it becomes sort of a hobby. You start to become more attached to your community, your neighbors. It’s interesting when you know people who are producers. You would be surprised. Why go to China for things that can be had right from your own backyard, or a neighbors’.

        .

      12. The Deplorable Renegade

        Seminole, I can’t stand MAINLAND Chinese. They’re treacherous and devious. Now the Chinese from Hong Kong or Taiwan are another story. Never knew any Vietnamese.

      13. Frank Thoughts

        Most Americans are fat and lazy. I did an experiment and only bought real made in America stuff: Red Wing shoes, etc. It is possible and all the products are excellent. You may not have the range as you would get from imports but you are supporting jobs in your country.

        Asians are sharp. Tariffs will never work because they will just switch to other markets. When I was in China the factories we worked with ran 24/7. They would make name brand stuff in the day for a US client (and make the chumps pay for the tech, IP etc.), and then at night, they would make the same thing, or with features missing for their cheapy third world clients (blacks etc.).

        It could be very funny. I remember watching these suit blazers come off the line and the colors were lurid: lime, orange, yellow etc. I was like “nobody is going to buy that!!!”. The manager just laughed and smiled through his cheap charoot: “I think you call them n#ggers? These are pimp suits , mo-fo!! Ha, ha!!”.

        Oh, well, I had the last laugh because I got to “date” his lean daughter for a few weeks before she went to Harvard on a scholarship.

        Moral of story? Asians are smart.

      14. Old Guy

        Fuck those Gooks. Used to be Lonoke Ark was a big catfish industry. low priced catfish from Viet Nam ruined that fish farming community.

      15. Asshat

        You don’t have to worry as long as you look for cheap stuff it will cum from Asia. It will never go away the dollar stores would be out of business. They are the only retail busineses doing well now. The bulk of walmarts merchandise is from china. This would hurt American businesses. It’s not gonna happen trump is gonna buckle of course he’s gonna tells he won the trade war. Americunts are lazy and china knows this they have created amerian dependantcy. How many women nowadays can sew something useful. How many men are workers. Americans are doped up stupid and dependant. To hurt china would hurt ourselves Americans don’t want to sacrifice and have voiced their unhappiness with trumps trade war.

        • Frank Thoughts

          So true. Trump will buckle first. China can just sell its surplus to its own people or to blacks in Africa who can’t make s#it.

          China has already gamed this battle.

          The world is a big place and there are lots of emerging markets out there.

          Countries are already quietly walking back on the Huawei ban.

      16. Clown World

        Siamese Cats Song Lady and the Tramp Lyrics
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