The US plans to impose 40% tariffs on transshipment goods involved in 'origin washing,' with China expected to be the most affected. The Trump administration intends to establish strict 'rules of origin,' and experts believe that the timing, possibly ahead of a potential 'Trump-Xi meeting,' makes them cautious about the introduction of such measures.

On July 31 local time, US President Trump signed an executive order, announcing the implementation of negotiated tariff rates for multiple countries starting August 7. At the same time, Trump aims to impose an additional 40% tariff on transshipment goods, with details of the work still in progress.

According to a report by The New York Times Chinese edition on the 4th, the US government may expand the definition of 'indirect transportation,' with the new rules applying to goods transported indirectly from any country. Experts assess that China will be the most affected, and in Beijing's view, these trade terms are clearly aimed at China, potentially impacting its trade negotiations with the US.

The report mentions that the executive order signed by Trump creates a new import category—goods that are not directly imported from the country of origin but are transported through other countries. Such goods will be subject to an additional 40% tariff, based on the existing tariff.

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The definition of such transshipment goods refers to goods that do not undergo a 'substantial transformation' in the transshipment country. For example, Vietnam has long denied allowing large-scale transshipment activities, asserting that the surge in Chinese components imported into Vietnam are assembled locally into new, different products, which should be marked as Vietnamese goods, not as Chinese-made.

According to the report, in addition to imposing a 40% tariff on transshipment goods, the Trump administration plans to implement so-called 'rules of origin' for indirect transportation within a few weeks, ensuring that importers can confirm that the goods are indeed produced in the country claimed by the seller.

The formulation of the rules of origin is very strict, and goods must meet certain conditions. For example, the 'US-Mexico-Canada Agreement,' which replaces the 'North American Free Trade Agreement,' stipulates that cars must contain 75% components produced in North America to enjoy duty-free treatment when crossing borders.

Brad Setser, a senior fellow at the Council on Foreign Relations (CFR), said that establishing rules of origin may have significant impacts. In the Trump administration's large-scale tariff measures, the most important long-term change may be the formulation of rules of origin that can define Chinese products.

Other experts hold a cautious attitude toward the establishment of strict rules of origin, believing that the Trump administration may not establish strict rules, especially now, as preparations for a potential meeting between Trump and Chinese leader Xi Jinping in the fall are underway, along with the ongoing trade negotiations between the US and China.

Priyanka Kishore, an economist from Singapore, believes that the executive order issued by the US on July 31 did not specifically mention measures against China, which may reflect the Trump administration's efforts to reach an agreement with its largest economic competitor. China's previous temporary halt in exporting rare earth magnets demonstrated its ability to leverage its trade levers, making the Trump administration aware that the other side of the negotiating table is a powerful opponent, and the US stance on transshipment goods has also softened slightly.