Chinese social media platforms Xiaohongshu and Douyin have recently been flooded with advertisements promoting so-called "origin-washing" products. These advertisements, in addition to promoting new regulations for re-exports from third countries like Southeast Asia, also offer strategies for circumventing high US tariffs through re-export and freight forwarding. Some businesses claim to offer "one-stop" re-export services that can "reasonably control US tariffs."
A man named "Freight Forwarder Lao Wang" announced in a Douyin video that he has opened a new transshipment channel approved by the US: "With traceable customs declaration at the place of origin, 80% of products can be fully compliant through transshipment. Our entire supply chain, from start to finish, includes domestic customs declaration, vessel booking, transshipment port operations, second-tier vessel booking, and US customs clearance and delivery. It's a one-stop solution, truly impressive, and the only one of its kind in China. We guarantee smooth customs clearance for you."
"The chances of re-exporting from Malaysia to the US have become very slim. I used to say it was a gamble, but there was still a chance before. Now the windows are closing one by one." The so-called bombshell news released by the "Malaysian Dai Ge" on Douyin stated that starting May 6th, all goods bound for the US must have certificates of origin issued by Malaysian government departments, and the Chamber of Commerce will no longer be able to issue them.
Many TikTok users are warning of the harshest crackdown yet on re-export trade, using AI to monitor global cargo routes in real time and cracking down on tax evasion via Southeast Asia. "Supply chains must be fully declared, even down to the source of buttons. Customs fraud carries a maximum sentence of 20 years, with fines up to 300% of the evaded tax and a 10-year profit retrieval. Close attention is needed as countries like Vietnam, Thailand, and Singapore are also cooperating in this action."
Chinese merchants took advantage of the 90-day exemption period to smuggle goods through customs and dump goods.
Regarding the recent surge in advertisements claiming to launder origins and re-export products, an anonymous Taiwanese businessman in Southeast Asia told Radio Free Asia on the 6th that President Trump announced tariffs on China last month reaching 145%, with some reaching 245%. The US granted over 70 countries a 90-day exemption. During this period, many Southeast Asian countries and Taiwan imposed 10% tariffs on US goods, significantly lower than China's. This allowed a large number of Chinese businesses to take advantage of this situation by shipping goods to third countries via land and sea routes, bribe customs, engage in smuggling, sell goods without authorization, and exploit these channels for dumping.
The Taiwanese businessman explained, "The main land routes with China are through Vietnam and Laos. Most of the goods are smuggled into Vietnam, where they collude with customs to obtain certificates of origin. They're usually labeled in China, for example, 'Made in Vietnam' for Vietnam and 'Made in Laos' for Laos. They then issue local certificates of origin and apply a 10% tariff. Many Malaysian importers also import goods from mainland China through semi-smuggling or undercover operations."
He also said: "If mainland China wants to ship goods to the United States, using this method to launder goods abroad and to the United States, it must dispose of the goods within 90 days. If it is produced and not sold, it will rot in mainland China and no one will want it."
The Taiwanese businessman mentioned that origin manipulation was initially done through labeling. Previously, semi-finished products imported into Vietnam enjoyed a nine-month "temporary import" tariff-free period. Companies would assemble imported parts into finished products and ship them within nine months to avoid the tax. About six years ago, when the US-China trade war began, products could only be labeled "Made in Vietnam" if they were produced at least 60% in Vietnam. Now, stricter regulations are in place, and even semi-finished products will face higher tariffs in the future. In response to reciprocal US tariffs, some southern factories have expanded their investments to adopt 100% Vietnamese manufacturing.
According to comprehensive reports, various countries are tightening inspections of goods bound for the US. Vietnam is strengthening origin checks on raw materials and imported goods to prevent the issuance of forged certificates. Thailand is also strengthening origin checks on products exported to the US to prevent tariff evasion. South Korean customs officials reported seizing nearly 30 billion won worth of foreign products with falsified country-of-origin information in the first quarter of this year, most of which originated in China and were destined for the US.
Freight forwarding business has emerged and fees have risen
Taiwanese businessman Li Mengju also stated in an interview with Radio Free Asia: "Manufacturers with the US as their primary market must find ways to survive. A 60%+ tariff is tantamount to an embargo. There's a huge demand, and they need to find transit points to sell to the US. Freight forwarders (customs brokers) capable of handling customs documents and certificates of origin have emerged, and their fees are bound to rise. Some freight forwarders even change containers, for example, reloading containers when shipping to Malaysia."
Li Mengju pointed out that Chinese products, particularly those from Southeast Asia, have long been exported to third countries to survive, often to the US. This "origin wash" practice has been practiced for years. The US has implemented reciprocal tariffs to prevent China from washing its origins, and stricter regulations will be implemented. Related countries are also tightening regulations to eliminate loopholes that could hinder negotiations with the US.
Regarding the emergence of transshipment freight forwarders claiming to be compliant on Douyin and Xiaohongshu, Li Mengju made a metaphor: "No one will do business that loses money, but some will do business that will get them killed, unless they are severely punished. However, severe punishment is the responsibility of the local government. The US and Chinese governments cannot severely punish local freight forwarders."
The large number of "origin-washing" advertisements reflects the trade difficulties faced by Chinese companies
In an interview with Radio Free Asia, Sun Guoxiang, a professor at the Department of International Affairs and Business at the University of South China, analyzed that the proliferation of "origin-washing" advertisements reflects the trade difficulties faced by Chinese companies and the complex realities of global supply chain adjustments. These issues and regulations are expected to intensify in the future, and if companies continue to rely on this practice, they will face increased risks. For example, violations of international trade law could lead to severe sanctions, cargo seizures, and market bans, damaging brand reputation, impacting long-term market positions, exacerbating international trade tensions, and even triggering retaliatory measures from importing countries.
Sun Guoxiang said that Europe, the United States and other places impose anti-dumping or countervailing duties on Chinese products, especially solar panels, steel, bicycles, and textiles. Therefore, by "washing the origin" to label the products as made in other countries, they can reduce tax costs and continue to compete in overseas markets.
Sun Guoxiang also pointed out that many Chinese companies originally planned to fully relocate their production bases to Southeast Asia or other low-cost regions, but factory construction and production capacity were not yet in place, so they resorted to "washing origin" tactics as a temporary transition. Although Europe and the United States have begun to strengthen inspections and review of certificates of origin, the intensity and speed of inspections have not kept pace, and businesses have openly promoted "washing origin" practices through advertisements.
He also said that the algorithms used by these e-commerce platforms make it easier for these ads to gain traffic and exposure, accelerating the spread of related information. Advertisers offer one-stop services, including processing certificates of origin, processing, and packaging, lowering the technical barriers for companies to implement origin manipulation.
