Recently, the Ministry of Trade of Vietnam has issued a new regulation aimed at cracking down on exporters illegally rerouting goods to the United States and other destinations to prevent Chinese companies from using Vietnam as a “source of origin laundering.”
According to reports from Reuters, this new regulation became effective on April 15th.
In early April, shortly after US President Donald Trump announced the implementation of “reciprocal tariffs,” the Vietnamese government held an emergency meeting to discuss countermeasures.
The Ministry of Trade of Vietnam stated that under the reciprocal tariffs imposed by the United States, there could be a significant increase in trade fraud. Failure to take measures to prevent fraudulent practices by exporters would make circumventing tariff sanctions by various countries “even more complex.”
Although the directive does not specifically identify the potential sources of these fraudulent goods, nearly 40% of Vietnam’s imported goods are sourced from mainland China. The United States has openly accused Chinese companies of using Vietnam as a transshipment center to evade US tariffs.
Vietnam has been subjected to a 46% reciprocal tariff imposed by the Trump administration, temporarily delayed until July. If the reciprocal tariffs are implemented as planned, it will severely disrupt Vietnam’s economic growth model that relies on exporting to the world’s largest market, the United States, and affect the substantial investments by foreign manufacturers in Vietnam.
Under this new policy, the Ministry of Trade of Vietnam, customs, and other agencies must strengthen supervision and inspection of imported goods to determine their origins, especially imported raw materials used for production and export.
On Tuesday, the Vietnamese government announced on its official website that Prime Minister Pham Minh Chinh has instructed officials at all levels to step up efforts to combat trade fraud, counterfeiting, and other illegal activities as Vietnam prepares for tariff negotiations with Washington to address the concerns of the US government.
The issuance of this new directive coincides with the visit of the General Secretary of the Chinese Communist Party, Xi Jinping, to Vietnam. During his visit, Xi signed multiple agreements with Vietnam, including enhancing cooperation between the two countries in issuing certificates of origin for goods.
According to allegations of illegal rerouting by Vietnamese exporters, although goods manufactured in China do not undergo substantial value addition in Vietnam, Vietnamese businesses would alter the certificates of origin in Vietnam, labeling them as “made in Vietnam,” before selling them to the United States to evade higher tariffs on Chinese products.
The Ministry of Trade of Vietnam has stated that stricter procedures will be implemented to inspect factories and monitor the issuance of “made in Vietnam” labels, especially for companies that have seen a sudden increase in certificate of origin applications.
The Ministry of Trade has also instructed relevant enforcement agencies to propose specific measures when necessary to prevent illegal rerouting.