The 40% Trap: And How We Keep You Out of It
In July 2025, the U.S. government announced a split-tariff structure for Vietnamese imports:
- 20% for verified, clean-origin goods
- 40% for any shipment flagged as a transshipment
That second word—transshipment—is where most brands are getting burned.
Because if you're using Chinese parts without transforming them, or if your paperwork doesn’t prove otherwise, your "Vietnam" shipment just became a "China" bill.
And that means you’re getting hit with a 40% tariff, even if the box says Ho Chi Minh.
What Actually Triggers the 40% Tariff
This is not about where the goods ship from.
It’s about whether Vietnam (or India, or Thailand) actually adds real value.
Here’s how U.S. Customs decides:
- Are core components made in China and merely assembled in Vietnam?
- Does the process in Vietnam change the product’s function or classification?
- Can you prove that the transformation happened locally?
If the answer is no—or the evidence is weak—you’re automatically classified as transshipping, and hit with the higher tariff.
What Most Importers Get Wrong
Most brands we meet have weak COO (Country of Origin) trails because:
- Their factory buys parts from China without disclosure
- Assembly happens offshore, but it doesn’t meet transformation thresholds
- There’s no contract, no BOM traceability, and no local invoice trail
- Final documentation is controlled by a middleman, not the buyer
The result: You look like you’re dodging tariffs, even when you’re not trying to.
The Fix: Build COO Like It’s a Defense File
Asia Agent helps clients pass tariff scrutiny by building real, defensible COO packages.
Here’s how we do it:
1. Full BOM Deconstruction
We work with your supplier directly to identify:
- Every component
- Country of origin
- Local transformation value
- HS codes and cost breakdowns
Why it matters: Tariff rules don’t care about labels—they care about value origin. We trace it line by line.
2. Process Mapping + Photo Logs
We document what transformation happens in the local hub:
- Is the product assembled, molded, or tested?
- Is the HS code changing?
- Are you gaining new functionality?
- Can you prove it with photos, process steps, and invoices?
Why it matters: Customs doesn’t believe claims. They believe evidence.
3. Local Contracting & Paper Trail Cleanup
We shift your contracts to local jurisdictions:
- Replace Chinese exporters with direct hub factories
- Get invoices and PO trails from Vietnamese, Indian, or Indonesian entities
- Secure transformation records and certifications under local law
Why it matters: When the factory, the contract, and the payment are all in Vietnam—it gets very hard to claim it’s Chinese.
4. COO File Creation
At the end of this process, you get a file you can hand directly to your broker:
- BOM with origin and value breakdown
- Transformation report with process logs and images
- Contracts and invoices from the local factory
- Summary memo justifying origin under U.S. law
Why it matters: You’re ready for audit. And you’ll likely never be flagged again.
What If It’s Too Late?
Even if you’ve already shipped, we can step in:
- Build a retroactive file
- Coordinate declarations with your customs broker
- Map a forward strategy to fix the next shipments
If you’re still relying on your Vietnam factory to "handle it"—you’re exposed.
If you don’t know where your motor, chip, or packaging came from—you’re exposed.
What Winning Brands Do
The brands we support across Vietnam, India, Indonesia, Bangladesh, and Thailand are already:
- Shifting value-add processes out of China
- Contracting direct with factories in local jurisdictions
- Mapping every component before it becomes a liability
- Creating transformation proof at the point of production
Because they know that in 2025, origin is everything.
Final Word
You don’t have to stop using Chinese parts. You just have to stop pretending they don’t matter.
COO isn’t a form. It’s a structure. And if it’s weak, your margin disappears.
We fix that.
