Singapore denies US tariff evasion claims

Singapore's Deputy Prime Minister and Minister for Trade and Industry, Gan Kim Yong, has rejected US allegations that the city-state is part of a 'shadow transhipment network' used to circumvent tariffs on Chinese goods. He emphasized that Singapore does not support using its trade infrastructure to bypass tariffs and will enforce rules of origin stringently.

Mr. Gan made the remarks at the Economic Society of Singapore's 70th anniversary dinner, following a visit to the US where he met with US Trade Representative Jamieson Greer. The US recently identified Singapore as one of approximately 40 economies allegedly involved in this network, which it claims Chinese exporters use to disguise product origins.

Singapore's Position on Transhipment

Singapore has firmly rejected the suggestion that its legitimate transhipment activities constitute tariff evasion. The distinction is critical for its maritime and logistics sector. Transhipment alone does not alter a product's country of origin. Goods moving through Singapore remain of Chinese origin unless they undergo processing in Singapore that meets specific, applicable rules of origin.

Singapore Customs has clarified the US standard. The US applies a 'substantial transformation' test to determine if a product qualifies as Singapore-origin. Minimal processing or simple assembly does not confer origin status. Therefore, a Chinese-made product cannot be shipped to Singapore, repacked, and then declared as Singapore-origin to avoid US tariffs or gain preferential treatment.

Enforcement and a Recent Case

Minister Gan pointed to a recent enforcement action as evidence of the government's seriousness. He stated that Singapore must maintain the credibility it has built as a trusted international trading hub. 'From time to time, we do need to take action, to demonstrate our seriousness in enforcing the rules,' he said.

The case involves charges filed on 14 August. A Singapore-registered company, Healthy Living Biotech, was charged alongside Singapore residents Yin Yuxi, 28, and Bernard Koh Wee Yiap, 54, and Chinese national Xue Xin, 37. They are accused of falsely declaring China-made mattresses as Singapore-origin goods to evade US import duties.

Mr. Gan concluded by reiterating Singapore's foundational principle. 'We frown upon such practices,' he said, referring to the misuse of its trade hub for tariff evasion.