Key facts
- Vietnam will address U.S. concerns about goods transshipment constructively, according to its foreign ministry.
- The U.S. estimates it loses $19 billion to $26 billion annually in tariff revenue due to transshipment of goods, primarily from China.
- The U.S. has imposed tariffs, including a 40% duty on identified transshipments.
- Vietnam agreed to drop tariffs on U.S. imports in exchange for lower export tariffs.
- U.S. officials suspect some companies use Vietnam as a route to bypass tariffs on Chinese goods through minimal processing or shell entities.
- Vietnam's customs department has been working to combat origin fraud and illegal transshipment since 2020.
Vietnam has stated it will constructively address concerns raised by the United States regarding the transshipment of goods, a practice that Washington believes is costing it billions in lost annual tariff revenue. The U.S. administration has intensified its scrutiny, viewing Vietnam as a potential rerouting channel for Chinese-origin goods to circumvent U.S. import duties.
Foreign Ministry spokesperson Pham Thu Hang told reporters that Vietnam would engage in dialogue consistent with the Vietnam-U.S. Comprehensive Strategic Partnership to sustain mutually beneficial trade growth and a transparent business environment. This statement follows Washington's assertion that it is losing approximately $19 billion to $26 billion annually in tariff revenue on goods, largely from China, that are transshipped through third countries like Vietnam.
In July 2025, the U.S. imposed a 20 percent tariff on a range of Vietnam’s exports and a steeper 40 percent duty on goods identified as transshipments. This move came as U.S. officials, including Secretary of Commerce Howard Lutnick, have voiced concerns that Vietnam has become a pathway for Chinese products into the American market, with some manufacturers allegedly establishing shell entities or light assembly lines in Vietnam to re-export goods under Vietnamese origin.
However, research suggests the extent of this rerouting may be less significant than perceived. A Harvard University study indicated that between 2018 and 2021, only 8.8 percent of Vietnam's export growth to the U.S. was attributable to rerouting, primarily concentrated in northern industrial corridors. Since 2020, Vietnam's General Department of Customs has been actively working to combat origin fraud and illegal transshipment.