U.S. Escalates Crackdown on Transshipment: 40% Tariff Penalty for Circumvention – What Importers Must Know
The U.S. will impose 40% tariffs on goods suspected of transshipment via third countries to evade duties. Learn how new enforcement measures target metals, auto parts, solar panels, and more.
Update as of July 31, 2025
The White House has issued a new directive strengthening enforcement against transshipment used to avoid tariffs. According to the official announcement, the U.S. Customs and Border Protection (CBP) will impose a 40% punitive duty on goods determined to have been rerouted through third countries or regions to disguise their true country of origin.
🔗 Source: White House Briefing – July 31, 2025
Key Measures Introduced
Under the new framework, any country, region, or facility identified as participating in transshipment schemes will be publicly listed every six months by U.S. authorities. This policy is part of a larger effort to prevent tariff evasion and protect domestic industries from unfair trade practices.
Focus Industries Under Scrutiny
The new regulations are not generic — they specifically target high-risk sectors known for origin manipulation or complex sourcing chains:
1. Metals Manufacturing & Processing
- Steel & aluminum must now be 100% melted and poured in the U.S. to qualify as domestic-origin.
- Strict controls will block materials routed through third-party countries.
- Affects downstream industries: appliances, industrial machinery, construction materials.
2. Automotive Components
- The U.S. Department of Commerce has initiated country-of-origin investigations on steel tubing and related parts used in vehicles.
- Focus on verifying whether parts were diverted through intermediaries to bypass country-specific duties.
3. Solar Energy Sector
- Anti-dumping (AD) and countervailing duties (CVD) on crystalline silicon photovoltaic cells now reach up to 3400% for imports from:
- Cambodia
- Malaysia
- Thailand
- Vietnam
- Applies whether or not the cells are assembled into modules.
4. Paper & Packaging Materials
- U.S. agencies have reopened probes into thermal paper imports, citing concerns over misreported origin.
- Products falsely declared may face retroactive duties and fines.
“Country of Origin” Rules Under the Spotlight
At the heart of the enforcement crackdown lies the ongoing complexity of origin determination. The U.S. uses the “Last Substantial Transformation” standard — where the country in which the final meaningful manufacturing change occurred determines origin.
However, this rule is highly subjective and hard to enforce, particularly for:
- Electronics & Semiconductors
- Machinery & Engineered Components
- Multi-stage Solar Assembly Lines
Discrepancies in interpretation continue to fuel compliance disputes and import delays.
What Should Importers & Manufacturers Do?
To minimize risk and maintain compliance under the new policy, businesses should:
✅ Conduct strict supplier audits and ensure traceable certificates of origin
✅ Reassess tariff codes and supply chains for affected product categories
✅ Engage customs brokers to ensure proper documentation and declarations
✅ Avoid low-transformation routing through intermediary countries
✅ Monitor CBP’s published watchlists (every 6 months)
Rising Regulatory Trends to Watch
U.S. enforcement is shifting from post-import audit to pre-import risk targeting. Importers may expect:
- Increased use of automated AI-driven flagging systems at customs
- More frequent requests for origin verification and documentation
- Enhanced cooperation with foreign customs agencies to track product flow
The U.S. government is clearly signaling that tariff circumvention via transshipment will no longer be tolerated. With steep penalties, public watchlists, and expanded enforcement, importers and exporters must proactively verify every link in their supply chain.
At LINKWAY FREIGHT, we help global shippers ensure compliance with U.S. import rules through:
- Expert customs documentation support
- Country-of-origin risk assessments
- Real-time trade regulation monitoring
📩 Need guidance? Contact us today to ensure your cargo is compliant and penalty-free.
🌐 Visit: [LINKWAY]
Disclaimer: This article is for informational purposes only and does not constitute legal or customs advice. For official information, please consult U.S. CBP or trade compliance professionals.
