• 349 days Will The ECB Continue To Hike Rates?
  • 349 days Forbes: Aramco Remains Largest Company In The Middle East
  • 351 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 751 days Could Crypto Overtake Traditional Investment?
  • 756 days Americans Still Quitting Jobs At Record Pace
  • 758 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 761 days Is The Dollar Too Strong?
  • 761 days Big Tech Disappoints Investors on Earnings Calls
  • 762 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 764 days China Is Quietly Trying To Distance Itself From Russia
  • 764 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 768 days Crypto Investors Won Big In 2021
  • 768 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 769 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 771 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 772 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 775 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 776 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 776 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 778 days Are NFTs About To Take Over Gaming?
The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030

The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030

According to Citigroup, the metaverse…

Another Banner Year for Billionaires

Another Banner Year for Billionaires

Unsurprisingly, last year was very…

  1. Home
  2. News
  3. Breaking News

Fake “Made In Vietnam” Certificates On The Rise As China Looks To Skirt Tariffs

Vietnam

In addition to the already long list of aftershocks from the U.S.-China trade war, including the number one fear of global recession, or higher prices for American consumers, we’re seeing a completely different perspective on the “Made in China” label. By a sleight of hand--or labelling--the trade war has prompted “Made in China” to become “Made in Vietnam”, even when it wasn’t.

At least, that’s the accusation coming out of Vietnam right now.

Vietnamese authorities are claiming that China is sidestepping Trump’s tariffs by fraudulently slapping labels on products that say “Made in Vietnam” before "certificates of origin are processed".

In Beijing’s attempt to circumvent tariffs using Vietnam--which enjoys low-tariffs imports to the U.S. thanks to a 2001 Bilateral Trade Agreement--Vietnamese authorities say they have identified “dozens” of fake “Made in Vietnam” certificates. The fraudulently certified goods range from agriculture and textiles to steel.

But it’s not the first time this issue has come up. The Vietnamese have been holding onto this narrative for over a year.

Back in September, U.S. customs officials uncovered Chinese plywood being shipped to the U.S. via a Vietnamese company. The process would see the Chinese ship plywood to Vietnam, unpack it and then repack it at a Vietnamese factory, Control Risks’ Singapore-based  Dane Chamorro told media last year.  

So why bring it up now, precisely? Likely because Vietnam is growing increasingly concerned that it’s going to end up taking the heat for this and risk some sort of punishment.

The Vietnamese Foreign Minister is worried that China’s scheme could “sabotage Vietnamese brands and products”. He’s also worried that there could end up being some sort of “tariff retribution from other countries”.

Related: Global Manufacturing Slowdown Is Bad News For The Stock Market

With that in mind, Vietnam is keen to close up this “Made in Vietnam” loophole--even if it is a belated response.

Honey could be another example of a product prone to export cheating from China to U.S.

China is the largest producer of honey, and Chinese companies in this segment have come under U.S. antidumping duties since 2001. But here, too, there is a clever workaround: Chinese honey companies send large unlabeled barrels of honey to Thailand and Vietnam, where it is relabeled for country of origin and then shipping to the U.S., bypassing anti-dumping duties.

The bottom line? It’s very difficult to enforce tariffs across the board in the era of globalization.

“It’s always a cat-and-mouse game ... As long as people are willing to take risks in search of those arbitrages of say 25 percent duties, it’s very difficult to enforce,” Bloomberg quoted Fred Burke, managing partner at law firm Baker & McKenzie (Vietnam) Ltd., as saying.

Desperate times calls for desperate measures.

According to an American Chamber of Commerce survey in China conducted in mid-May, just days after Trump doubled tariffs on $200 billion in Chinese goods and Beijing retaliated with higher tariffs on $60 billion in U.S. goods, more than 80 percent of Chinese manufacturers said they were getting hit hard.

And for U.S. companies in China, the “workaround” might end up being dramatically … legal. The rise in America’s protectionist tendencies, according to the same survey, shows that over 40 percent of U.S. companies in China were “considering or have relocated” production facilities outside China.

In the meantime, there’s always that nagging sentiment that tariffs aren’t accomplishing whatever it is that Trump is hoping they will. If this is about the trade surplus, then the numbers aren’t exactly flattering. Even discounting the fake labeling, Chinese exports rose 1.1 percent to $213.8 billion and imports fell 8.5 percent to $172.2 billion in May, according to Chinese customs agency said. While some of that may have been an anticipatory response to the next round of tariffs … June and July data should give us a more precise handle on the situation.  

By Damir Kaletovic for SafeHaven.com

More Top Reads From Safehaven.com:

Back to homepage

Leave a comment

Leave a comment