Trump's 40% tariff evasion penalty lacks key details

WASHINGTON: President Trump has threatened to pile an additional 40% tariff on any product that Washington determines to be "transshipped" through another country, a punishment aimed at stopping goods mainly from China dodging US duties.

That penalty was included in the White House announcement Thursday evening that laid out global tariff rates from 10% to 41%. But many countries are still missing the "rules of origin" details necessary to determine what the US considers transshipped.

"It is still not clear how this will be implemented in practice," Leah Fahy, chief economist at Capital Economics, said in a note Friday.


A decision on those rules will be made in the coming weeks, a senior US official said in Washington on Thursday. The US had earlier said the issue would be resolved before Aug. 1. The details are particularly important for countries in Southeast Asia, such as Vietnam, which have emerged as key suppliers of goods to the US. Many of the firms and factories had shifted from China in response to Trump's first trade war with Beijing and most still rely on Chinese inputs for production.