• Vietnam's trade ministry issues directive against illegal transshipment to the U.S.
• New measures aim to strengthen inspection and supervision of imported goods.
• Concerns rise as nearly 40% of Vietnam's imports come from China, facing U.S. tariff scrutiny.
• Emergency government meeting follows announcement of potential 46% tariffs by the U.S.
• Vietnam's Prime Minister emphasizes combatting trade fraud ahead of tariff negotiations.

Vietnam's trade ministry has issued a directive effective from April 15 to crack down on illegal transshipment of goods destined for the United States and other trading partners, aiming to avoid steep U.S. tariffs. The ministry noted that the risk of trade fraud is likely to increase due to escalating tensions surrounding U.S. tariffs, leading to potential complications in avoiding sanctions on imported goods if such fraud is not curtailed, according to the document reviewed by Channel News Asia, Reuters, and South China Morning Post.

The directive highlights that Vietnam imports nearly 40% of its goods from China, with accusations that Chinese companies use Vietnam as a transshipment hub to evade U.S. tariffs. Vietnam has faced a 46% "reciprocal" tariff imposed by the Trump administration, currently paused until July, which if enacted could significantly harm Vietnam’s growth model that is heavily reliant on U.S. exports and foreign investments, Reuters and South China Morning Post report.

To implement the directive, officials from the trade ministry and customs agencies are instructed to tighten supervision and inspection of imported goods to determine their origin, particularly raw materials used in production and export. Moreover, Prime Minister Pham Minh Chinh has urged officials to address issues concerning trade fraud and counterfeiting, especially as discussions on tariffs with the U.S. are on the horizon, as stated by Channel News Asia and Reuters.

The directive also coincides with an agreement signed during a recent visit by Chinese President Xi Jinping, emphasizing cooperation on certifying the origin of goods. This agreement comes amid warnings from Beijing against countries making trade deals with the U.S. at China's expense. Vietnam's Government Office issued the directive in response to U.S. accusations that some goods exported from China were merely repackaged in Vietnam before being sent to the U.S. to benefit from lower tariffs, according to South China Morning Post.

To ensure compliance, new procedures will be enforced to monitor factories and the issuance of "Made in Vietnam" labels, with increased scrutiny on businesses reporting sudden spikes in applications for certificates of origin. The ministry's document highlights the need to devise “specific measures to prevent illegal transshipment,” reaffirming Vietnam's commitment to addressing these trade issues decisively, as noted by Reuters, South China Morning Post, and Channel News Asia.