The Not-So-Secret Way Around U.S. Tariffs

Cabinets made in China were rerouted through Malaysia and ended up in U.S. kitchens—sparking a Customs probe and splintering an American industry

By Inti Pacheco of The WSJ. Excerpts:

"Haiyan [Chinese company Qingdao Haiyan Group] had been accused of sending Chinese-made cabinets to the U.S. by shipping them through Malaysia, masking the origin of the goods—a scheme known as transshipping."

"Haiyan and other Chinese companies have moved operations or established new facilities in countries such as Vietnam, Malaysia or Thailand, where they can send raw materials to make goods. Some companies have used these countries as temporary holding places where they can mask the origin of goods"

"In recent years, CBP has found transshipment schemes used to obscure the origin of mattresses, solar panels, nails and quartz countertops. In 2023, CBP prevented importers from evading $500 million in duties following investigations"

"Sullivan, the Cabinets To Go owner, said that in July 2021, an inspector that he hired in Malaysia to check on his supplier saw a container full of finished wooden cabinets arriving at the facility. The boxes had labels saying that the cabinets had been manufactured in Malaysia but the inspector traced the container and found that it had just arrived from China, Sullivan said.

"A month later, a Haiyan employee told Cabinet to Go executives that a shipment of 13 containers that was on its way from Malaysia also had cabinets or components that had been manufactured in China."