World about US

Japanese companies that moved production from China to Vietnam, Thailand, Taiwan and other Asian countries may face a new type of U.S. trade risk. As Daily Shincho notes, simply changing the country of final assembly may no longer be enough to protect exports to the United States from tariffs, investigations and accusations of circumventing restrictions.

The China-plus-one strategy—diversifying production while retaining some operations in China—became one of the key responses of Japanese businesses to the U.S.-China confrontation that has continued since 2018. Corporations sought both to preserve access to the enormous Chinese market and to reduce their dependence on supplies from China for their U.S.-bound operations. However, Washington’s current approach could call into question the very logic behind this redistribution of production capacity.

The Japanese article pays particular attention to a White House report titled The Great Transshipment Scam. U.S. authorities, according to the report’s account, view the restructuring of trade flows not only as a natural relocation of production but also as possible tariff arbitrage. Under such a scheme, goods or components from countries subject to high tariffs gain access to the U.S. market through countries with lower rates. In the American debate, China is the most prominent historical example of this risk.

The main problem for Japanese manufacturers is that their facilities outside China often remain closely tied to the Chinese industrial base. Even after moving final assembly to Vietnam or Thailand, companies may continue to use Chinese components, materials, machine tools, equipment and subcontracting services. If the United States begins examining not only the country from which a finished product is shipped but also the origin of its parts, the amount of value added, the extent of processing and the actual independence of the production process, fully legal operations in a third country could also come under suspicion.

In other words, the concept of “circumvention exports” risks expanding. Previously, it was primarily associated with the simple transshipment of Chinese goods or the alteration of documents when shipping them through another jurisdiction. Now, however, claims could be brought against products that were genuinely assembled or processed in Vietnam, Thailand or Taiwan but, in the assessment of the U.S. side, remain insufficiently separated from the Chinese supply chain.

This is particularly sensitive for Japanese businesses, since Vietnam, Taiwan, Thailand and South Korea have become important bases for Japanese manufacturing and logistics in recent years. At the same time, these economies have significantly increased their presence in the U.S. market. According to the figures cited in the article, China’s share of U.S. imports fell from 21.6% in 2017 to 7.6% in January–August 2026. Meanwhile, the shares of Taiwan, Vietnam, South Korea and Thailand rose noticeably.

For Washington, this trend may look not only like supply diversification but also like grounds for checking how genuine the relocation of production actually was. Vietnam has already become the largest source of the U.S. goods trade deficit, making it a particularly prominent focus of trade scrutiny. Rising shipments of computer equipment, servers and other goods linked to the investment boom in artificial intelligence further increase the importance of Asian production chains. Taiwan and Vietnam are identified as among the main beneficiaries of this demand.

From the Japanese perspective, this creates an ambiguous situation. On the one hand, moving production capacity out of China has helped companies reduce direct geopolitical and tariff risks. On the other, the countries that became alternative manufacturing bases could themselves come under U.S. pressure. It will not be enough for companies to present a certificate of origin stating “Made in Vietnam” or “Made in Thailand.” They will likely have to demonstrate that the local facility has genuine economic independence and that the processing is not merely formal.

In Daily Shincho’s analysis, this issue is viewed not as another episode in the trade confrontation between Beijing and Washington, but as a practical challenge to Japan’s export model. Companies must reassess the origin of their components, the structure of value added, the dependence of overseas plants on Chinese suppliers and the routes used to deliver goods to the United States.

Thus, the previous “de-Sinicization” may prove insufficient if it consists merely of moving final assembly outside China. For Japanese businesses, the key question is no longer the plant’s location in itself, but whether a company can convincingly prove to U.S. regulators that its Asian production network is genuinely independent of China rather than a new way of preserving its previous dependence.

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