US Completely Blocks Transshipment! If Southeast Asian Countries Do Not Cooperate, They Will Face US Market Access Restrictions

According to reports, officials from the Office of the United States Trade Representative (USTR) and the Department of the Treasury have communicated the above-mentioned content through diplomatic channels.Pressuring Southeast Asian countries such as Vietnam, Malaysia, and Thailand to strengthen transshipment controls, and to implement stricter inspections and additional tariffs on imports and re-exports suspected of being of Chinese origin.。

This measure aims to maintain the United States' leverage in the China-US trade negotiations and prevent China from circumventing the high tariffs imposed on Chinese goods by the US through the "back door" of Southeast Asia. Currently, Chinese goods exported to the United States face average tariffs ranging from 25% to 60%.

According to White House data, one-third of Vietnam's exports to the United States are suspected to be Chinese transshipped goods, while Malaysia and Thailand account for 10-15% of their exports to the U.S. under similar suspicions.

The United States is formulating "rules of origin" standards for products from Southeast Asia, which will define local products and transshipped products based on the calculation of raw materials, indirect production costs, and labor costs.

According to senior Southeast Asian officials involved in the trade negotiations with the United States, the "rules of origin" standards set by the U.S. are:

⚠️ Regional Value Content (RVC) means that the local value content must reach 70%, and the value components from China cannot exceed 30%, in order to be recognized as originating from Southeast Asian countries.

⚠️ The products must undergo substantial manufacturing or processing in Southeast Asian countries to achieve substantial transformation. There must be a change in tariff classification (CTC) of at least 6 digits to demonstrate substantial processing.

The Trump administration regarded transshipment as "trade fraud" and signed an executive order as early as July this year.Chinese goods transshipped will be subject to an additional 40% tariff.。

U.S. Treasury Secretary Scott Basset stated, "If Southeast Asian countries do not cooperate, they will face U.S. market access restrictions.”。

This year, Southeast Asian countries have all strengthened their rules of origin (ROO) and transshipment controls, focusing on preventing Chinese goods from circumventing U.S. tariffs by “washing” their origin through Southeast Asia. Various countries have introduced relevant measures.Stricter certificate issuance, review systems, and punitive measures.。

Latest update: On July 2, 2025, the US-Vietnam trade agreement framework requires Vietnam to strengthen Rules of Origin (ROO) standards to prevent transshipment. Vietnam plans to issue a new decree to increase penalties for origin fraud and launch it in Q3.China Cargo Transit Monitoring SystemChina Goods Transshipment Monitoring System, using digital tracking to verify the origin of imported raw materials.

Key Provisions:

Non-originating goods (especially components from China) must undergo "substantial transformation," such as a change in HS code or a regional value content (RVC) of at least 35-40%.

Transshipped goods face an additional 40% tariff.

Fines for fake certificates or forged certificates of origin will be doubled.

Latest update: Effective May 6, 2025, the Ministry of Investment, Trade and Industry (MITI) will become the sole issuing authority for Non-Preferential Certificates of Origin (NPCO), replacing chambers of commerce and associations for goods exported to the United States. On July 14, Directive No. 1/2025 requires that the export, transshipment, and transit of high-performance AI chips (of U.S. origin) obtain trade permits, closing regulatory loopholes.

Key Provisions:

Strengthen the cooperation between NPCO applications, audits, and customs to combat transshipment fraud, and increase penalties for false certificates of origin.

The Rules of Origin (ROO) require "sufficient processing." A high proportion of Chinese components (over 60%) is regarded as transshipment.However, the United States requires Malaysia to prove that at least 70% of the content of exported products is local content.。

Latest update: On September 3, 2025, Thailand announced the establishment of a 50-member special task force in October to manage millions of certificates of origin, addressing the rules of transshipment in the US-Thailand trade negotiations. By August 15, seven major industries (such as textiles and jewelry) are required to increase local content to avoid a 40% tariff.

Key Provisions:

The Regional Value Content (RVC) must be at least 40% local content; otherwise, it is considered transshipment.The United States requires that at least 60% of the value of finished products be produced within Thailand to be recognized as "Made in Thailand." Thailand is negotiating to propose raising the RVC threshold from 40% to around 50%.。

The Department of Foreign Trade is temporarily the sole certificate issuing authority.

As of the latest update on July 22, 2025, the U.S.-Indonesia Mutual Trade Framework Agreement calls for negotiations to "facilitate ROO" to ensure the benefits of the agreement primarily go to the U.S. and Indonesia. On April 30, the Minister of Industry acknowledged legal loopholes allowing transshipment, and the Textile Association urged for stricter scrutiny in the issuance of Certificates of Origin (COO).

Key Provisions:

The validity period for import permits (API-P/API-U) is up to one year, and commodity balancing is required for iron, steel, and textiles.

Transshipment requires approval from the customs office (in cases of misdelivery or damaged goods).

Indonesian PMK No. 4/2025 stipulates an import VAT of 11% and prohibits simple labeling.

The latest update: On July 27, 2025, Singapore Circular No. 06/2025 reiterates the accurate declaration of "Country/Region of Origin" in import/export/transshipment permits, applicable to both non-preferential/preferential ROO. Strengthened review of transshipments among ASEAN members.

Key Provisions:

For goods to be recognized as originating from Singapore, they must undergo substantial transformation: the goods must undergo "substantial transformation" in Singapore, with specific criteria for determination as follows:

Local Content Requirement: At least 25% of the ex-works price of the goods (i.e., the price of the goods at the manufacturer's factory) must consist of local content.

Tariff classification change: The tariff classification of the goods must change by 6 digits.

Chemical reaction conditions: or if goods undergo a chemical reaction under HS Chapters 27 to 40, they meet the requirements of "substantial transformation."