Former Envoy Says Illegal Transshipment Is a Small Share of Vietnam's U.S.-Bound Exports

Former U.S. ambassador to Vietnam Marc Knapper said illegal transshipment accounts for a “very small percentage” of Vietnam’s exports to the United States. He made the assessment Nov. 3 as Vietnam’s goods trade surplus with the United States reached $140 billion in the first 10 months of 2026.

Knapper said the term has taken on different meanings. Some Trump administration figures use it to describe a broader range of supply-chain activity, including assembling products with parts from neighboring countries. “Some have falsely labeled normal supply chain activities as transshipment,” he said at a business summit in Ho Chi Minh City.

Illegal transshipment involves falsifying a product’s country of origin to evade tariffs. Knapper described a Vietnamese exporter importing a finished product from China, labeling it as Vietnamese and then shipping it to the United States as an example. He called that practice fraudulent and said Vietnam was cracking down on it while working with customs agencies, including U.S. Customs and Border Protection.

The Trump administration has argued that moving parts of Chinese supply chains to other countries to benefit from lower tariffs harms the U.S. economy and reduces tariff revenue. Knapper distinguished that activity from ordinary assembly using regional inputs, which he said countries including the United States also do.

Under an initial agreement announced in July 2025, Vietnam accepted a 20% U.S. tariff on regular exports and a 40% rate for goods classified as transshipped from China. The agreement did not specify how that determination would be calculated. It was in limbo after a February Supreme Court decision deemed most of President Donald Trump’s tariffs unlawful. The United States currently levies a 12.5% tariff on many Vietnamese goods following a Section 301 investigation that alleged Vietnam had not done enough to combat forced labor.

Vietnam’s goods exports totaled $475.04 billion in 2025, including $153.2 billion to the United States, its largest export market. China was its largest import source, supplying $186 billion in goods that year.