Vietnam Cracks Down on Illegal Transshipment
U.S. Ambassador Marc Knapper says only a very small share of Vietnam's exports to the U.S. are illegally transshipped.
Updated on Nov. 9, 2026 in International Trade
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Former U.S. Ambassador to Vietnam Marc Knapper said at the Fortune Southeast Asia 500 Summit in Ho Chi Minh City on Nov. 3 that only a very small percentage of Vietnam's exports to the U.S. are illegally transshipped. Vietnam's goods trade surplus with the U.S. reached $140 billion in the first ten months of the year.
Why it matters
Transshipment, the falsification of a good's country of origin to evade tariffs, has drawn scrutiny as U.S. trade policy shifts. The debate over how much trade is affected shapes how tariffs are applied to Vietnamese and Chinese goods.
Vietnam's goods trade surplus with the U.S. reached $140 billion in the first ten months of the year, while the White House estimated $19 billion to $26 billion in annual federal revenue losses from transshipment. The reporting does not quantify what share of Vietnamese exports are illegally transshipped, and the administration's broader definition of transshipment remains contested.
The players
Marc Knapper
Former U.S. ambassador to Vietnam from 2022 to 2026, who made the transshipment remarks at the Fortune summit.
U.S. Customs and Border Protection
The U.S. federal agency responsible for border security and customs enforcement, which works with Vietnamese customs counterparts on transshipment.
The details
Knapper, who served as U.S. ambassador to Vietnam from 2022 to 2026, said Vietnam has been cracking down on illegal transshipment alongside counterpart customs agencies, including U.S. Customs and Border Protection. Under an initial trade agreement announced in July 2025, Vietnam accepted a 20% tariff on regular exports to the U.S. and a 40% tariff on goods deemed transshipped from China.
Timeline
July 2025: Initial trade agreement sets 20% and 40% tariffs.
August 2025: White House accuses over 40 economies of a Great Transshipment Scam.
February 2026: U.S. Supreme Court deems most Trump tariffs unlawful.
Nov. 3, 2026: Knapper speaks at the Fortune summit in Ho Chi Minh City.
2030: Officials target completion of a China railway project.
Market Dynamics
The 12.5% U.S. tariff on many Vietnamese goods was imposed after a Section 301 investigation, and the transshipment debate now shapes how those duties apply. The U.S. Supreme Court's February ruling deeming most Trump tariffs unlawful adds uncertainty to how these tariff regimes will hold.
For importers and investors exposed to Vietnamese or Chinese manufacturing, the applicable tariff rate depends on how origin rules are enforced, including the 20% and 40% rates set under the 2025 agreement and the 12.5% rate on many Vietnamese goods. Changes to how transshipment is defined could alter landed costs for these goods.
The takeaway
Trade surplus figures and tariff rates tell only part of the story, since the share of goods actually transshipped depends on how transshipment is defined. Readers tracking tariffs should watch how origin-rule enforcement evolves alongside court rulings on tariff authority.
Further reading
For more on the policy forces behind these disputes, see International Trade.
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