HANOI (Reuters) - Vietnam has said it will crack down on goods of Chinese origin illegally relabeled “Made in Vietnam” by exporters seeking to avoid U.S. President Donald Trump’s tariffs on Chinese imports.

Vietnamese customs have found scores of such cases amid the ongoing U.S.-China trade dispute, the department said in a statement posted to a government website on Sunday.

“The faking of origin and the illegal transhipment of goods happens most often in the sectors of textiles, seafood, agricultural products, tiles, honey, steel and iron, aluminium and timber products,” the department said in the statement.

Some importers had been illegally re-packing goods from China in “Made in Vietnam” packaging and then applying for a Vietnamese certificate of origin with which to export to the United States, Europe and Japan, Vietnam customs said.

In one such example, which the statement said was uncovered by U.S. customs, a Vietnam-based manufacturer of timber products was found to have been importing Chinese timber which it then relabeled and exported to the United States.

Vietnam’s customs department is developing a process to better identify and impose penalties on businesses which carry out such violations, the statement said.

Vietnam has emerged as one of the largest beneficiaries of the trade war between Beijing and Washington as some businesses are shifting their supply chains away from China in order to avoid tariffs. An analysis of trade data by Japan’s Nomura Holdings Inc earlier this month showed Vietnam had easily benefited more than other countries.

The Southeast Asian country relies heavily on China for materials and equipment for its labour-intensive manufacturing. Meanwhile, the United States is its largest export market.

Foreign minister Pham Binh Minh said in a speech to Vietnam’s national assembly last week that the government has created a steering committee in response to the trade war. </s> Chinese exporters who are hoping to evade tariffs as high as 25% on some of their goods are hoping to capitalize on the explosion of exports from Vietnam to the US - and not by simply and legally routing their products through Vietnam as a legal transshipment point, but by masking their true origins, provoking fears that the US might seek to punish the Vietnamese for failing to crack down on this type of fraud.

On Sunday, Vietnam released a statement pledging to increase penalties on trade-related fraud. It was one of the first times an Asian government has ever alleged such misbehavior, and comes after Vietnamese authorities found dozens of fake product origin certificates and illegal transfers presumably by Chinese companies trying to sidestep US tariffs on everything from agriculture to textiles, according to Bloomberg.

The crackdown comes as Vietnam has emerged as one of the fastest growing sources of American imports.

One member of the Vietnamese national assembly's economic committee said the government is worried it could provoke the wrath of the US if it doesn't crack down on the flow of mislabeled Chinese products. The sheer magnitude of the jump in Vietnamese exports has prompted some to question how much of this could possibly be due to legitimate commerce.

Some say that a "cottage industry" for circumventing Vietnamese tariffs has emerged out of nowhere.

The Southeast Asian country’s reported shipments to the U.S. have jumped this year as China’s have slumped. While there’s evidence that some of those gains are due to shifting supply chains, analysts have questioned how much of the recent surge is legitimate. Fraudulent cases discovered by Vietnam’s government include packaging on Chinese goods being changed to say "Made in Vietnam" before certificates of origin are processed. The government cited an example of U.S. customs officials uncovering Chinese plywood being shipped to America through a Vietnamese company. "A cottage industry for circumventing U.S. tariffs will likely bloom, given the high tariff rates and huge potential profit," said Chua Hak Bin, a senior economist at Maybank Kim Eng Research Pte. in Singapore. "ASEAN governments will likely crackdown on such re-routing for fear of being seen as a backdoor," Chua said, referring to the Association of Southeast Asian Nations.

And while the number of 'questionable' shipments will always be 'relatively small', "there will always be leakages and work-arounds to avoid tariffs. But we do not see it as a widespread phenomenon." </s> Chinese goods illegally labelled “Made in Vietnam” will risk penalties by Vietnam, the latter said on the government website, Reuters reports.

“The faking of origin and the illegal transhipment of goods happens most often in the sectors of textiles, seafood, agricultural products, tiles, honey, steel and iron, aluminium and timber products,” it has been announced.

The false labels would allow Beijing to avoid Washington’s tariffs amid a raging trade war. The US is one of the major markets for Vietnamese goods. Last year, Washington imposed billions of dollars in tariffs on China, with Bejing firing back in a reciprocal way. The trade war saw another leap after US intensified attempts to force Chinese tech giant Huawei out of its and European markets. </s> Hanoi has vowed to crack down on Chinese companies illegally using 'Made in Vietnam' labels on goods shipped to the U.S. to avoid high tariffs.

The customs department discovered dozens of fraudulent product-origin certificates on goods including textiles, fisheries, farm products, tiles, honey, iron, steel and plywood, according to the Vietnamese government's website.

Exporters have started shifting production from China to Vietnam to avoid 25 per cent levies imposed by U.S. President Donald Trump on $200 billion worth of Chinese goods amid a spiralling trade war.

But Hanoi said some manufacturers are illegally claiming their goods are from Vietnam when in fact they originate in China.

The government cited an example of U.S. customs officials uncovering Chinese plywood being shipped to America through a Vietnamese company.

The trend has 'affected the reputation of Vietnamese businesses and goods', said Vietnam's Deputy Prime Minister Pham Binh Minh, quoted in an official report published Sunday on the government website.

'We could even get tariff retribution from other countries, and if that happens, it will hurt our economy,' he said.

'We will increase the punishment to deter cases of goods claiming to be Vietnamese goods entering other markets,' he added.

The report said Vietnamese customs officials had uncovered dozens of cases of incorrectly labelled goods destined for the United States, Europe and Japan.

The government called for more stringent inspection of exports to those markets and said Vietnam could be punished by the U.S. - one of its leading trade partners - if it failed to stem the problem.

Vietnam has long been a manufacturing hub for cheaply-made goods from Adidas sneakers and H&M dresses to Samsung smart phones and Intel processors.

Those exports have soared this year as Beijing and Washington have escalated tit-for-tat tariffs on billions of dollars worth of goods.

In the first three months of this year, U.S. imports from Vietnam reached nearly $16 billion, up 40 per cent from the same period last year, according to U.S. trade data.

Nearly half of all American companies working in China have said they are considering shifting production from the so-called 'Factory of the World' as a result of the trade dispute, according to a poll by the American Chamber of Commerce in China.

Trump raised the tariffs last month after trade talks broke down, prompting Beijing to retaliate with higher duties on $60 billion worth of American products.

The U.S. President warned today he will slap huge new tariffs on China if his counterpart Xi Jinping doesn't show up for a planned face-to-face meeting later this month and insisted the Chinese economy will never overtake the United States.

Trump delivered his hardline message ahead of the G20 summit on June 28-29 in Osaka, Japan, which could mark a turning point in the trade dispute between the world's two biggest economies.

Asked if a failure by Xi to come to the summit would lead to tariffs kicking in on a further $300 billion in Chinese imports, Trump told CNBC television: 'Yes it would.'

Trump said the meeting was 'scheduled' and that he expects Xi to attend.

'I would be surprised if he didn't go,' Trump said. 'I think he's going, I haven't heard that he's not.'

However, as U.S.-Chinese tensions mount, a spokesman for Xi's government said last month that he had 'no information at present' on Trump-Xi talks. </s> HANOI (BLOOMBERG) - Vietnam said it will impose higher penalties on Chinese goods transferred to the country and illegally relabelled as made-in-Vietnam for export to the United States to dodge tariff hikes.

The customs department has detected dozens of fraudulent certificates of product origin and illegal transfers of goods ranging from agriculture and textile to steel and aluminium, the government said in a post on its website on Sunday (June 9).

Vietnam's exports to the US have surged this year at the same time that China's shipments to America slumped amid a trade war between the world's two largest economies.

While there's evidence of rising foreign investment into Vietnam as businesses adjust their supply chains, there are also worries Chinese products may be being rerouted via the South-east Asian nation to avoid higher US tariffs.

Mr Do Van Sinh, a standing member of the National Assembly's economic committee, said Vietnam is concerned it may be punished by the US for allowing fake made-in-Vietnam products to be exported to America, according to the government's post.

Fraudulent cases discovered by the government include packaging on Chinese goods being changed to say made-in-Vietnam before certificates of origin are processed. It cited an example of the US customs department uncovering Chinese plywood being shipped to America via a Vietnamese company.

Customs officials in Vietnam are beefing up their supervision and inspection of goods to crack down on the practice, the government said.

Vietnam is already under scrutiny from US authorities after the Treasury Department added the nation to a watchlist for currency manipulation last month. Vietnam has said its exchange rate won't be used to create an unfair trade advantage.

The authorities in the South-east Asian nation are concerned the US-China tensions will hurt economic growth. Deputy Prime Minister Pham Binh Minh told the National Assembly last week that gross domestic product could drop six trillion dong (S$350 million) in the next five years because of the trade war. </s> has vowed to crack down on manufacturers illegally using "Made in Vietnam" labels on items destined for to dodge punishing tariffs as the US- trade spat drags on.

Exporters have started shifting production from to to avoid 25 percent levies imposed by US on $200 billion worth of Chinese goods.

But said some manufacturers are illegally claiming their goods -- including textiles, seafood and -- are from when in fact they originate in

The trend has "affected the reputation of Vietnamese businesses and goods", said Vietnam's Pham Binh Minh, quoted in an official report published Sunday on the government website.

"We will increase the punishment to deter cases of goods claiming to be Vietnamese goods entering other markets," he added, according to the report.

The report said Vietnamese customs officials had uncovered dozens of cases of incorrectly labelled goods destined for the United States, and

The government called for more stringent inspection of exports to those markets and said could be punished by the US -- one of its leading trade partners -- if it failed to stem the problem.

Vietnam has long been a for cheaply-made goods from sneakers and dresses to and processors.

Those exports have soared this year as and have escalated tit-for-tat tariffs on billions of dollars worth of goods.

In the first three months of this year, US imports from Vietnam reached nearly $16 billion, up 40 percent from the same period last year, according to US trade data.

Nearly half of all American companies working in China have said they are considering shifting production from the so-called 'Factory of the World' as a result of the trade dispute, according to a poll by the

Trump raised the tariffs last month after trade talks broke down, prompting to retaliate with higher duties on $60 billion worth of American products. </s> WASHINGTON – Vietnamese officials say China is intentionally mislabeling its products as "made in Vietnam" to avoid American tariffs, and have ordered offices to more aggressively examine products' certificates of origin.

Chinese firms first export products to Vietnam, then change the labeling on packages before exporting the goods to the United States, Japan or Europe, they said.

"Dozens" of products have been identified, Hoang Thi Thuy, a Vietnamese Customs Department official, told state-run media, and goods like textiles, fishery products, agricultural products, steel, aluminum, and processed wooden products were most vulnerable to the fraud.

More: Donald Trump rips U.S. Chamber of Commerce for attacking his tariff strategy

Vietnamese state media noted that in 2017, the Customs Department exposed a company called INTERWYSE for trying to rebrand 600 Chinese-made speakers and phone chargers with a "Made in Vietnam" label.

"It will sabotage Vietnamese brands and products and it will also affect consumers. We could even get tariff retribution from other countries, and if that happens, it will hurt our economy," Foreign Minister Pham Binh Minh told the Vietnamese National Assembly last week.

Vietnam does not have any legal requirements for certification of the "Made in Vietnam" label. The country's current regulations require that goods be produced partly or completely in Vietnam, but does not provide a mechanism for determining the veracity of the label.

More: As trade battle escalates, Chinese newspaper to US: 'Don't say we didn't warn you'

More: China warns travelers of harassment by United States authorities

Amid President Donald Trump's escalating trade war with China, international firms have shifted some of their supply chains to Vietnam in an effort to avoid American tariffs. The United States is currently Vietnam largest export partner.

The trade war shows few signs of slowing down. On Monday morning, Trump threatened to increase tariffs on Chinese products unless Chinese President Xi Jinping agreed to meet with him at the G20 summit later in May. </s> Vietnam Cracks Down on Chinese-Made Goods Being Shipped to U.S.

(Bloomberg) -- Vietnam said it will impose higher penalties on Chinese goods transferred to the country and illegally relabeled as made-in-Vietnam for export to the U.S. to dodge tariff hikes.

The customs department has detected dozens of fraudulent certificates of product origin and illegal transfers of goods ranging from agriculture and textile to steel and aluminum, the government said in a post on its website on Sunday.

Vietnam’s exports to the U.S. have surged this year at the same time that China’s shipments to America have slumped amid a trade war between the world’s two largest economies. While there’s evidence of rising foreign investment into Vietnam as businesses adjust their supply chains, there are also worries Chinese products may be being rerouted via the Southeast Asian nation to avoid higher U.S. tariffs.

Do Van Sinh, a standing member of the National Assembly’s economic committee, said Vietnam is concerned it may be punished by the U.S for allowing fake made-in-Vietnam products to be exported to America, according to the government’s post.

Fraudulent cases discovered by the government include packaging on Chinese goods being changed to say made-in-Vietnam before certificates of origin are processed. It cited an example of the U.S. customs department uncovering Chinese plywood being shipped to America via a Vietnamese company.

Customs officials in Vietnam are beefing up their supervision and inspection of goods to crack down on the practice, the government said.

Vietnam is already under scrutiny from U.S. authorities after the Treasury Department added the nation to a watchlist for currency manipulation last month. Vietnam has said it’s exchange rate won’t be used to create an unfair trade advantage.

Authorities in the Southeast Asian nation are concerned the U.S.-China tensions will hurt economic growth. Deputy Prime Minister Pham Binh Minh told the National Assembly last week that gross domestic product could drop 6 trillion dong ($256 million) in the next five years because of the trade war.

To contact the reporters on this story: Mai Ngoc Chau in Ho Chi Minh City at cmai9@bloomberg.net;John Boudreau in Hanoi at jboudreau3@bloomberg.net

To contact the editor responsible for this story: Nasreen Seria at nseria@bloomberg.net </s> Vietnam cracking down on Chinese goods falsely labelled and shipped to US to avoid tariffs
Vietnamese customs say it will crack down on goods of Chinese origin illegally relabeled "Made in Vietnam" by exporters seeking to avoid American tariffs on Chinese imports.