Vietnam Cracks Down on relabelled Chinese-Made Goods Being Shipped to U.S

Some goods being relabeled as made-in-Vietnam to avoid tariffs
Vietnam exports to U.S. have surged this year amid trade war

Vietnam said it will impose higher penalties on Chinese goods transferred to the country and illegally relabeled as made-in-Vietnam for export to the U.S. to dodge tariff
hikes.

The customs department has detected dozens of fraudulent certificates of product origin and illegal transfers of goods ranging from agriculture and textile to steel and aluminum, the government said in a post on its website on Sunday.

Vietnam’s exports to the U.S. have surged this year at the same time that China’s shipments to America have slumped amid a trade war between the world’s two largest economies. While there’s evidence of rising foreign investment into Vietnam as businesses adjust their supply chains, there are also worries that products from neighboring China may be being rerouted via the Southeast Asian nation to avoid higher U.S. tariffs.

Trade Diversion

Vietnam is one of the fastest-growing sources of American imports

Source: U.S. Census Bureau

Do Van Sinh, a standing member of the National Assembly’s economic committee, said Vietnam is concerned it may be punished by the U.S for allowing fake made-in-Vietnam products to be exported to America, according to the government’s post.

Currency Watchlist

Fraudulent cases discovered by the government include packaging on Chinese goods being changed to say made-in-Vietnam before certificates of origin are processed. It cited an example of the U.S. customs department uncovering Chinese plywood being shipped to America via a Vietnamese company.

Customs officials in Vietnam are beefing up their supervision and inspection of goods to crack down on the practice, the government said.

Vietnam is already under scrutiny from U.S. authorities after the Treasury Department added the nation to a watchlist for currency manipulation last month. Vietnam has said it’s exchange rate won’t be used to create an unfair trade advantage.

Authorities in the Southeast Asian nation are concerned the U.S.-China tensions will hurt economic growth. Deputy Prime Minister Pham Binh Minh told the National Assembly last week that gross domestic product could drop 6 trillion dong ($256 million) in the next five years because of the trade war.

 

By Mai Ngoc Chau

This article was first appeared on Bloomberg
%d bloggers like this: