Taiwan Cracks Down on Chinese Fraud to Protect US Trade Relations

Government Intensifies Efforts to Prevent Tariff Evasion and Maintain Trust with the United States.

Taipei, April 16 – The Taiwanese government is taking decisive action to combat Chinese attempts to circumvent US tariffs by misrepresenting the origin of goods using Taiwan as a transit point, according to Economic Affairs Minister Kuo Jyh-huei (郭智輝).

Speaking at a hearing of the Legislative Yuan's Economics Committee, Kuo outlined the government's comprehensive strategy. This includes imposing significant fines, up to NT$3 million (US$92,245), on businesses found violating origin rules.

Minister Kuo emphasized the importance of effectively addressing the practice of "transshipping" – the misrepresentation of imported goods' origin – to ensure Taiwan's credibility and success in ongoing trade deal negotiations with the United States.

Reiterating measures first announced last Thursday, the government will enhance import monitoring, enforce stricter penalties, and intensify anti-dumping investigations. Violators will face substantial fines.

The focus of these measures is particularly on the fastener and machine tool industries, where materials are often imported from China for processing in Taiwan.

Under the Foreign Trade Act, businesses found to falsely label the country of origin for their products could receive a warning, face administrative fines ranging from NT$60,000 to NT$3 million, or even have their business suspended.

In the most severe cases, companies could have their export/import registration revoked.

To proactively educate businesses on the complexities of origin rules, the Ministry of Economic Affairs held a meeting on Tuesday, attended by over 600 representatives from the machinery, electronics, metals, and other sectors.

The Ministry of Finance, in a parallel effort, has established a task force to strengthen customs inspections, preventing the misuse of Taiwan for re-exporting goods to the US and avoiding higher duties.

The Ministry of Finance will also actively gather domestic and international intelligence to identify suspicious manufacturers and products, employing big data analysis to uncover violation patterns.

Furthermore, the government is considering rewarding informants who report violations, as stated by Customs Administration Director General Peng Ying-wei (彭英偉) during the legislative session.