The Trade Enforcement Enhancement Act was drafted in 2019 during Trump's first administration, but it became a "dead bill" due to the resistance of the Democratic Party. Due to the conflict between China and the United States in the new energy industry, the bill was restarted in 2024. If the bill is passed, simple processing in a third country will no longer be regarded as "conversion of origin", and China-US trade may enter the era of "checking every order".

According to Reuters, on the day when Trump delivered a joint speech to Congress, industrial giants such as steel pipe factories, kitchen cabinet manufacturers, and auto parts collectively wrote to Congress, lamenting that Chinese exporters circumvented US tariffs through "third-country transit" and bluntly stated that "US factories are being dragged down alive", and the US government is helpless!

Market losses and competitive pressures

Executives of medium-sized US industrial companies said at an event with congressmen on Capitol Hill that the United States has been losing tariff revenue for many years, and Chinese companies have squeezed out the market of American companies by using trade rules. They pointed out that even if American companies win trade cases, due to limited enforcement funds, Chinese companies can easily find loopholes to avoid penalties.

Contents of the bill

Criminal conviction: For the first time, "tariff fraud" is listed as a federal felony, and corporate executives face up to 20 years in prison.

Global traceability: Importers are required to submit data on the entire supply chain of goods, and even a screw must be explained. The compliance cost has skyrocketed, and the document certification fee for a single container may exceed US$5,000.

Collective responsibility mechanism: If a company is found to have re-export trade, all related companies in that country can be directly frozen from exporting to the United States.

Sky-high fine: 300% of the amount of tax evasion + 10 years of profit recovery

Vietnam, Malaysia and Thailand

have been included in the first monitoring list. If the bill is passed, simple processing in a third country will no longer be considered as "conversion of origin", and Sino-US trade may enter the era of "checking every order".

Trump administration's trade policy

As President Trump launches a new round of tariff wars with China, Mexico and Canada, the "Anti-Third Country Transshipment Act" has been proposed again. The previous Congress failed to pass the bill. In a speech to Congress on Tuesday, Trump said the United States had been "cheated for decades by almost every country on Earth," adding that his administration would take reciprocal tariff or non-tariff measures against any retaliation by U.S. trading partners.

The United States has re-introduced the "Combating Third-Country Transshipment Act," showing its determination in trade enforcement. For Chinese exporters, this may mean higher compliance costs and legal risks. Companies need to pay close attention to the progress of the bill and take corresponding measures to ensure compliance and avoid possible fines and criminal prosecution.

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