If you are an eCommerce exporter dealing with the realities of U.S. tariffs on goods from China, Canada, Mexico, or other countries, you may be searching for solutions.
Re-export trade, a concept brought back to focus by the tough tariff environment in 2025, offers some answers to you. Given the detrimental effects of previous tariffs, understanding re-export trade is now more vital than ever. For those facing punitive tariffs and a significant competitive disadvantage, it can be an alternative to bypass trade barriers and hefty rates.
However, it is important to acknowledge the complexity of this issue, particularly in the context of international trade. Therefore, this article aims to give you the straight facts about everything that is involved in this topic.
Just to clarify, we are not suggesting you to do it by any means, but we are going to explore why cost-driven businesses, particularly exporters, are looking at re-export trade as a potential way to deal with tariffs, and what you need to think about in terms of its feasibility and legality for your specific situation. Understanding this stuff is crucial if you are trying to navigate the tricky world of global trade right now.
Re-export Trade: What Does It Mean?
Re-export trade includes several terms with similar meaning: Entrepot trade, trans-shipment, supply chain diversification. While they are referred to differently, they are centered around the strategic movement of goods to optimize cost and market access.
At its core, re-export trade involves importing goods into a country, potentially storing them, and then re-exporting them to a final destination, with the re-export country (often called an entrepot) acting as an intermediary, enabling trade between the two nations without significantly altering the goods themselves.
Usually, the origin countries boast much lower production costs, while the re-export strategy seeks to avoid tariffs or other trade restrictions imposed by the destination country.
As of this date, some of the most common rerouting scenarios include:
- China to the United States via Southeast Asia (e.g., Malaysia, Singapore, or Vietnam)
- European Union to Russia via Turkey or the UAE
- India to the European Union via the United Arab Emirates or Singapore
Why Re-Export Trade?
There can be a million reasons for implementing re-export trade. However, common reasons involve a political and economic element. A major point is the desire to circumvent tariffs imposed by destination countries on goods originating from specific regions. By strategically rerouting goods through an entrepot country, businesses can have unique access to markets while minimizing the financial burden of duties.
Third-party countries play a significant role in the process. During the previous tariffs in 2019, reports suggested a 31% surge in imports from Vietnam, potentially as a means to bypass U.S. tariffs.
It is also a not-so-secret way to bypass tariffs, as large companies, such as Apple, are also known to shift parts of their production to India to reduce their own exposure to U.S. tariffs on Chinese goods.
Beyond tariff avoidance, re-export trade can serve as a mechanism for:
- Navigating sanctions: Re-routing goods through neutral countries
- Leveraging favourable trade agreements (FTAs): For example, import products via FTA approved countries to access lower tariff rates
- Optimizing logistics process: Adopting a common trade hub (Hong Kong, Singapore) for regional exports
- Accessing value-added services: Repackaging, relabeling, or even light assembly, further enhancing the value proposition of the re-export route
Tariffs, Trade and The Need for Re-Export
Consider the example of an eCommerce exporter in China and exporting to the United States. Faced with significant tariffs imposed by the U.S. government, the company might choose to reroute its goods through an entrepot like Singapore or Vietnam. By doing so, they can avoid the tariffs potentially, reduce their overall costs, and maintain their competitiveness in the U.S. market.
The rising tariff cost is a significant driver for supply chain diversification, allowing alternative strategies such as re-export trade to thrive.
Considering the rapid stance of Trump on the tariff, spiking it for selected countries, exporters around the world are trying to leverage strategies that help reduce their exposure to U.S. tariffs, including contingent measures such as re-export trade.
On the other hand, there is an uncertainty factor to it. In our previous discussion with logistics and 3PL players, several have expressed concerns about further steps and production plans given the uncertain tariff landscape, especially those frequently trading across China, Canada, and Mexico, who are hit the most severely by the imposed tariffs.
Trump’s Tariffs: May 2025 Updates
Recent tariff changes have significantly impacted exporters from different countries.
The ongoing tensions between the U.S. and China have led to a series of tariff escalations that have affected trade dynamics globally. On May 12, 2025, both nations agreed to a temporary rollback of most tariffs for 90 days, signaling a potential thaw in relations and a commitment to further negotiations.
| Date | Tariff Rate | Details |
| Feb 4 | 10% | New tariffs of 10% on all Chinese imports are implemented as part of renewed trade policies. |
| Mar 3 | 20% | Tariffs increase to 20% on all Chinese goods, reflecting escalating trade disputes. |
| Apr 9 | 145% | A significant escalation occurs with tariffs reaching as high as 245% on various products, marking a critical point in the trade conflict.
The exemption for Chinese goods valued under $800 was eliminated, resulting in a 90% duty or a flat fee between $75 to $150 per item. In retaliation, China imposes a 125% tariff on imports from the United States. |
| May 12 | 10% | The U.S. and China agree to a temporary rollback of most tariffs for 90 days, aiming to ease tensions and foster negotiations towards a broader trade deal.
The U.S. currently proposes a 30% rate but an interim 10% on Chinese products during the 90-day rollback. |
Beyond China, a 25% tariff was imposed on imports from both Canada and Mexico. In addition, a 10% “baseline” tariff was announced for imports from 60 countries, which was included as a further wave of tariff increases in April.
On the same day, approximately 60 countries, identified as “worst offenders,” faced significantly higher, though unspecified, tariff rates. A 90-day pause was implemented, allowing countries other than China to pay the 10% baseline rate during this period.
Inventory Cycles Are Anticipated
Goldman Sachs projects a 20-30% drop in U.S. retail imports in the coming months, signaling the start of a significant inventory destocking cycle expected to continue through late 2025.
The predictions presented by Goldman Sachs are complex, but here’s the lore to it: A Q1 import surge driven by businesses preempting tariffs. But as retailers deplete their stockpiles, import declines will become more evident than ever. This destocking trend is expected to be apparent in the upcoming data.
Eventually, restocking will be the next stage, even if tariffs increase costs. The traditional flow of goods from Asia to the US is likely to resume during this restocking phase, although the timing of restocking remains highly uncertain.
Mostly Losers, But Some Winners May Emerge
Tariffs incentivize businesses to diversify their supply chains and reroute goods through other countries, such as Vietnam and Mexico, to circumvent those tariffs. This pattern is likely to repeat, leveraging the “substantial transformation” rule. This rule allows goods undergoing significant processing in a country to be classified as originating from that country, effectively making re-export trade a potentially viable option.
Other Asian countries, including Thailand, Malaysia, and Indonesia, also serve as alternative assembly locations for China-imported goods destined for the U.S. market.
Uncertainty Around Trade Looms
The decision to engage in re-export trade is not always a straightforward one. Businesses must carefully weigh the costs and benefits of rerouting, considering factors such as transportation costs, warehousing fees, customs duties, and the potential for delays.
Furthermore, businesses must remain aware that re-export trade is a well-known strategy, and the U.S. and other countries may react to changes in trade practices, potentially levying tariffs on these countries as well.
From the April round of tariff updates, it is easy to see that Trump’s tariff efforts are deliberate in reducing the chances of re-export trade, where India, Vietnam, and Taiwan (common countries for re-export trade) are hit with additional tariffs totaling 26%, 46%, and 32%.
How Logistics Leaders View Re-Export Trade
Engaging in re-export trade can offer significant advantages, but it also comes with complexities that businesses must navigate. The decision to embrace re-export trade necessitates a careful evaluation of several key factors.
To enrich the subsequent discussion, we included thought leaders in the logistics & 3PL industry on their views around re-export trade during a recent industry forum.
#1 IMG Supply Chain
As the General Manager from IMG Supply Chain, Shenzhen notes, “Transshipment is a known solution, but when we talk about solutions, it carries uncertainty“. This uncertainty stems from the increased costs associated with adding another port to the supply chain and the complexities of ensuring compliance and navigating the supply chain shifts.
While re-export trade adheres to customs regulations and documentation requirements, it can easily cross into illegality. A key risk arises when goods are falsely declared as originating from the entrepot country without undergoing sufficient transformation. This illegal transshipment, often intended to evade tariffs, can be considered fraudulent and faces increasing scrutiny from the destination countries.
Therefore, regulatory compliance is an important aspect in re-export trade. “In this process, we try to obey the laws and regulations of the local exporting country and the importing country as much as possible, and we do entrepot trade under this compliance.”, as the General Manager from IMG Supply Chain elaborates.
The existence of a “relevant industry chain” in the transshipment country is paramount, as the General Manager of IMG Supply Chain noted, especially given that the presence of such a chain significantly impacts the ability to obtain valid certificates of origin (COO) and ensures the destination country’s customs acceptance of the goods.
#2 DHgate
DHgate is now making a decisive bet on Southeast Asia. As their Logistics General Manager declared, “The first is the overseas supply chain… We will definitely have merchants whose factories are in Southeast Asia.” The manufacturers are considered “preferred vendors”, giving them a clear advantage when navigating the platform.
To solidify this shift, DHgate is actively incentivizing direct sourcing from these Southeast Asian origins, dangling “more rights” and “preferential policies” to encourage vendors to embrace this model. The message is clear: DHgate wants goods flowing directly from Southeast Asia to the global markets, including the United States.
However, DHgate acknowledges the logistical hurdles inherent in this shift. DHgate’s Logistics General Manager candidly questioned: “Are these transshipment links as mature as those in China?” Despite the strategic benefits of Southeast Asian sourcing, significant investment and collaboration will be required to overcome the logistical complexities of establishing new, robust supply chains.
#3 UniUni
UniUni, a company with roots in Canada and expansion into the United States, is primarily focused on domestic Chinese sales. However, they are strategically exploring opportunities to leverage their existing North American infrastructure.
As the China Sales Director stated, “For the final mile, we are doing a domestic business. But because UniUni started in Canada, and then did in the U.S., we are now also looking at whether there is a Canada-to-US route that we can use as a buffer.”
UniUni views re-export trade as one potential solution in the complex landscape of trade wars and shifting supply chains, but not a guaranteed fix. The Director emphasized, “Re-export trade is always a solution.” However, they also acknowledged the importance of strategic supply chain relocation, stating the need to justify an industry value chain in the local country.
UniUni also faces customs valuation challenges, particularly with T86 declarations for low-value shipments. This discrepancy highlights a potential compliance issue that could impact UniUni’s cross-border operations.
Key Considerations for Re-Export Trade
While the concept of re-export trade is not novel, successfully executing it is far from simple. Deciding whether or not to implement a re-export strategy hinges on careful evaluation of several key factors:
- Cost and Timing: It involves a thorough assessment of all associated costs, including transportation, warehousing, duties, and compliance. Furthermore, the time required for each leg of the journey needs to be factored in, as delays can erode any potential cost savings from the re-export trade.
- Compliance: Navigating the complex web of regulations in the origin, transshipment, and destination countries is paramount. This includes adhering to customs regulations, trade agreements, and any applicable export or import restrictions.
- Local Value Chain: The existence of a robust local value chain in the transshipment country is crucial. This includes factors such as processing capabilities, packaging facilities, and the availability of necessary certifications. A strong local value chain can add legitimacy to the re-export process and increase the likelihood of acceptance by the destination country’s customs authorities.
Final Words
The resurgence of re-export trade in 2025 is driven by the challenging tariff landscape facing eCommerce exporters. While offering a potential pathway to circumvent trade barriers, it is a complex strategy demanding careful consideration of costs, compliance, and local value chain dynamics.
Beyond re-export, adopting enhanced, multi-carrier order tracking solutions like TrackingMore can offer resilience in navigating the uncertainties of global trade. We currently support over 1,400 carriers and 80 airlines globally, and we are a premier tracking API solution chosen by over 10,000 enterprises since 2014.
We believe this in-depth analysis has provided valuable insights. Let us know if you want to see more content like this.
The TrackingMore team shares insights on logistics tracking technology, industry trends, and e-commerce logistics solutions to help businesses streamline shipment tracking and enhance customer post-purchase experience.
