China’s exports to the United States have collapsed while shipments to other countries are rising. The numbers paint a clear picture. According to WTO analysis, China’s exports to the U.S. plummeted 77 percent in 2025, while exports to Mexico and Canada surged 25 percent. The reason behind this shift is transshipments. Beijing is rerouting goods through third-party nations to bypass Washington’s 145 percent tariff wall.
Vietnam has become a key player in this strategy. Imports from China jumped 5.5 percent, while exports to the U.S. doubled. A Harvard study found that 20 percent of Vietnam’s U.S.-bound exports in tariffed sectors were repackaged Chinese goods, with newly established firms, many Chinese-owned, facilitating the evasion. This is not a coincidence. It is a calculated move to keep Chinese products flowing into the American market despite trade restrictions.
Malaysia is also playing a role in this scheme. Customs data reveals a surge in origin laundering within the electronics and textile industries. Chinese components are being reclassified with new paperwork before arriving at U.S. ports. This manipulation allows Chinese manufacturers to sidestep tariffs while American importers unknowingly pay inflated costs. The system is broken and middlemen are profiting while Washington struggles to enforce trade policies.
The consequences of unchecked transshipments are severe. American manufacturers face unfair competition while consumers continue to pay the price for ineffective enforcement. The solution is clear. Supply chains must be secured, third-country hubs audited, and backdoor trade crushed. Half-measures will not fix this problem.
SOURCES:
https://finance-commerce.com/2025/05/china-us-trade-drop-tariffs-global-shift/