What China’s Tariff Rerouting and Russia’s Parallel Imports Have in Common

Tariffs. Sanctions. Trade barriers.

They’re meant to contain — but increasingly, they only redirect.
This week, we spotlight two cases on opposite ends of the map, using different routes to achieve the same outcome: circumventing economic walls.

Let’s break it down.

China’s Southeast Asia Shuffle

After the U.S. hiked tariffs on Chinese imports to as high as 125%, Chinese manufacturers wasted no time adapting. Their tactic?

Reroute exports through Southeast Asia — especially Vietnam, Malaysia, and Cambodia — and relabel the origin.

This method, known as transshipment, leverages a legal gray zone. If goods are "substantially transformed" in another country, they may technically originate there. But enforcement is tightening.

China isn’t doing this quietly — they’re investing in SEA industrial zones. In Cambodia, over 50% of factories are now Chinese-owned.

Russia’s Parallel Import Lifeline

On the flip side, Russia is using its neighbors to bypass Western sanctions. Since the Ukraine invasion, direct trade with the West has cratered — but the flow of goods hasn’t stopped.

Instead, sanctioned goods take a detour through former Soviet states. Russia legalized parallel imports in 2022, encouraging local companies to buy goods abroad and resell them domestically, even without authorization from the original manufacturer.

Two Tactics, Same Playbook

Both strategies rely on loopholes, intermediaries, and deliberate ambiguity. The common thread? Global commerce adapts faster than policy enforcement.

What’s next?

• The U.S. is weighing stricter origin rules — including beneficial ownership disclosures for SEA-based exporters.

• The U.S. is expanding trade enforcement and may impose penalties on intermediaries in Southeast Asia

• Importers, manufacturers, and compliance teams must prepare for a more aggressive enforcement environment — especially around rules of origin and final destination.

These aren’t just temporary hacks. They’re becoming long-term adaptations in the post-globalization economy.

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