Are Chinese companies using Cambodia to evade US tariffs?
- China’s exports to Southeast Asian country have been rising steadily since start of trade war
- Meanwhile, Cambodia’s exports to US in first three months of 2019 rose 22 per cent to US$820 million.
“Although Cambodia’s certificate of origin requires only 40 per cent of a product to be originated from the country, it’s still a relatively high bar,” said Kong, whose company mostly makes car parts for export to Europe.
The SSEZ is located 210km (130 miles) west of Phnom Penh and was built as a joint venture between China and Cambodia under the Belt and Road Initiative, Beijing’s ambitious trade and infrastructure development plan. Most of the 165 companies in the zone are Chinese-owned.
In June, the US inspected and fined a number of companies based in the SSEZ for evading tariffs by re-routing goods through Cambodia. The move came after Vietnam’s customs department found scores of exporters illegally relabelling Chinese goods as “Made in Vietnam” to avoid US tariffs.
Although the US did not say how many Chinese companies were fined or how big the fines were, the operation coincided with record high Chinese exports to Cambodia, one of Beijing’s biggest supporters within the Association of Southeast Asian Nations.