Chinese Exports Surge 8% in April 2025, Bypassing U.S. Tariffs via Southeast Asia

Chinese exports rose 8% year-on-year in April 2025 despite U.S. tariffs, according to China Customs. Direct shipments to the U.S. fell 21%, but rerouting through Southeast Asia, particularly Vietnam, Malaysia, Indonesia, and Thailand, helped maintain U.S. market access. This transshipment strategy involves sending goods to third countries for minor processing or relabeling. The solar panel industry exemplifies this shift, with exports from Indonesia and Laos surging. U.S. authorities are increasing scrutiny on these practices, but enforcement challenges persist as Chinese firms diversify production locations globally.

Southeast Asia Emerges as a Key Trade Conduit

The latest trade data underscores a significant shift in global supply chains. As the U.S. under President Donald Trump intensified its trade crackdown on China—raising tariffs on some goods to as high as 245%—Chinese exporters have increasingly turned to Southeast Asia as a workaround. Exports from China to countries like Vietnam, Malaysia, Indonesia, and Thailand surged by 21% in April, suggesting that these nations are serving as transshipment hubs.

This rerouting strategy, known as transshipment, involves shipping Chinese goods to a third country where they are either lightly processed or simply relabeled before being sent to the U.S. as originating from that intermediary nation. While the practice exists in a legal gray area, it has become a widespread tactic among Chinese exporters seeking to circumvent U.S. trade barriers.

“From China’s perspective, it hasn’t diversified away from the U.S. as a final customer. It’s just that it has been intermediated by third economies,” said Gerard DiPippo, a Chinese economy expert at RAND.

Solar Panels: A Case Study in Rerouting

The solar panel industry offers a clear example of how Chinese firms are adapting. After the U.S. imposed tariffs on solar imports from Vietnam, Malaysia, Thailand, and Cambodia in June and November 2024, exports from these countries to the U.S. plummeted by 33% year-on-year. In contrast, solar panel exports from Indonesia and Laos—where many Chinese-owned factories have recently been established—surged nearly eightfold in the same period. Following the second round of tariffs, their exports skyrocketed to 17 times previous levels.

As a result, Indonesia and Laos now command a combined 29% share of the U.S. solar module market, up from less than 1% in 2023. Much of this capacity was built by Chinese companies specifically to bypass U.S. tariffs, according to industry analysts.

“All solar manufacturing capacity in the four targeted Southeast Asian countries will likely be shut down or dramatically scaled back,” said Yana Hryshko, Head of Global Solar Supply Chain Research at Wood Mackenzie.

Logistics Firms Enable the Shift

Chinese logistics companies have played a pivotal role in facilitating this rerouting. In Yiwu, a major export hub in eastern China, freight forwarders openly advertise services that help exporters avoid U.S. tariffs. One company, HC Transit, boasts of shipping mattresses through Singapore and steel plates through India, offering “totally neutral packaging” to obscure the Chinese origin of goods.

Another firm, Shanghai Xiangcheng International Freight Forwarding, promoted its services on Chinese social media with slogans like “Say goodbye to U.S. tariffs,” likening the process to choosing a mild dish at a hot pot restaurant.

While some of these practices may cross legal lines, others operate within the bounds of international trade law by establishing legitimate production or assembly operations in third countries. However, U.S. customs authorities have begun to crack down, increasing scrutiny of certificates of origin and requesting more documentation from importers.

Manufacturing Migration and Market Diversification

The rerouting trend is not limited to solar panels. Chinese manufacturers across various sectors—including electronics, furniture, and consumer goods—have been relocating production to Southeast Asia to maintain access to Western markets. This shift has been underway since the first wave of U.S.-China tariffs in 2018, but it has accelerated in recent months.

Yiwu China Commodities City, the world’s largest wholesale market, has expanded its footprint globally, setting up offshore hubs in tax-friendly zones like Dubai’s Jebel Ali Free Zone. These hubs allow Chinese businesses to obtain local certificates of origin, further complicating efforts by U.S. authorities to trace the true source of imports.

In addition to Southeast Asia, Chinese firms are exploring new production bases in countries such as Turkiye, Oman, Saudi Arabia, the UAE, and Ethiopia. These locations offer both tariff-free access to the U.S. and proximity to emerging markets in Africa and the Middle East.

U.S. Response and Enforcement Challenges

The U.S. Department of Commerce has accused Chinese solar panel manufacturers of using Southeast Asian countries as fronts to flood the American market with cheap products. The department argues that insufficient processing is being done outside China to justify the new country of origin labels.

To counter these tactics, the U.S. has imposed additional tariffs and launched investigations into customs fraud. However, enforcement remains a challenge. “Now it’s a lot harder to tariff-hop from one country to another,” said Mark Ludwikowski, senior director at law firm Clark Hill. “But it’s not impossible.”

Zack Hadzismajlovic, a trade attorney at McCarter & English, noted a sharp increase in customs inquiries. “I would say right now is not a good time to test customs,” he warned.

Export Growth Amid Trade War

Despite the trade war, China’s overall export performance remains robust. The 8% year-on-year increase in April 2025 reflects not only rerouted trade but also a broader diversification of export markets. In the first quarter of 2025, 37% of China’s solar exports went to Asia, up from 25.4% in 2024, while shipments to Europe declined to 34% from 41%, according to energy think tank Ember.

This shift suggests that while the U.S. remains a critical market, Chinese exporters are increasingly looking to Asia and other regions to sustain growth. The importance of the U.S. market to China’s export economy has declined from 19.8% in 2018 to 12.8% in 2023.

References

• Indonesia and Laos solar exports surge to U.S. as tariffs hit SE Asian rivals
• China’s exports surge despite falling US trade and tariff tensions | The Express Tribune
• In trade war with the US, China holds a lot more cards than Trump may think − in fact, it might have a winning hand