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If your $8 gadget or $20 shirt from an overseas marketplace suddenly takes longer to arrive—or costs more—the reason might be something called place of origin washing.
This increasing practice, sometimes just called origin washing or illegal transshipment, is how some exporters mask where a product really came from to dodge United States tariffs.
It isn’t new, but the stakes are higher as tariffs on Chinese goods continue to be volatile, including a recent executive order ending duty-free entry for low-value packages from China.
What does this mean for your shopping cart? Possibly slower deliveries, steeper prices, or shifting product availability—and a lot of behind-the-scenes maneuvering.
Key Takeaways
- Place of origin washing disguises where a product is made to avoid tariffs, often by routing it through a third country, but experts say it’s inefficient and unlikely to bring meaningful savings to U.S. shoppers.
- While you might not notice changes immediately, delivery speed shifts or pricing could soon reflect these behind-the-scenes tensions.
- Apparel and electronics are among the industries most likely to be affected.
What Is Place of Origin Washing?
As it pertains to customs law, origin washing—or concealing a product’s true country of origin to avoid tariffs—is traditionally known as illegal transshipment, says Lenny Feldman, a managing partner at Sandler, Travis & Rosenberg.
Transshipment itself isn’t new or inherently illegal. It can be legal, Feldman explains. For example, if a shipment from China simply passes through Sri Lanka on its way to the U.S., that’s fine. Goods often pass through intermediary ports on the way to the U.S.
But when companies label goods as being from Vietnam or Mexico when they weren’t made there, transshipment becomes origin washing and illegal in the U.S.
The key difference is whether the product undergoes what’s called “substantial transformation” in the intermediate country. That means a material change in the product’s form, appearance, nature, or character.
Feldman offers the example of apparel: sending raw yarn and fibers from China to Vietnam or Malaysia to be woven into fabric and sewn into garments could legally change the country of origin.
But simply repackaging Chinese-made shirts in another country wouldn’t pass the test because the product’s form, appearance, nature, and character are all still the same.
Why Do It?
For Chinese exporters, origin washing is a way to stay competitive in the face of stiff U.S. tariffs, which have hit a range of product categories from electronics and apparel to electric vehicles.
However, from an economist’s perspective, it’s not efficient. Antonio Fatas, a professor of economics at INSEAD, notes that avoiding tariffs “will allow exports to remain more competitive … but it is an inefficient way as it requires time, effort, and resources to end up with the same outcome as before.”
Still, some companies may think it’s worth the effort. A Financial Times report published in May found that some Chinese exporters had ramped up efforts to employ origin washing to avoid tariffs imposed by President Donald Trump.
Rinse and Repeat
The Korea Customs Service flagged 29.5 billion won (the official currency of South Korea) in country-of-origin washing violations in the first quarter of 2025 alone. In U.S. dollars, that’s $20.8 million, and 97% of it was tied to shipments bound for the U.S. The Q1 total was nearly 85% of the entire 2024 total of 34.8 billion won in violations.
Can Illegal Transshipment Lead to Lower Prices?
It’s possible—but unlikely, says Feldman. Shifting production to cheaper countries might reduce costs on paper, but that doesn’t always reach your checkout screen.
“Even if it’s going to be produced at lower costs, I don’t necessarily think the manufacturer is going to reveal that to the importer,” Feldman says. “They’re probably still going to charge the same amount.”
And there are other costs. Building capacity in Vietnam, Malaysia, or Mexico takes money, time, and supply chain recalibration.
Companies already operating in those regions might scale up, but those starting from scratch face logistical hurdles, notes Feldman.
Why It Matters to U.S. Shoppers
The biggest takeaway: There’s no guarantee that these workarounds will lower your costs. In fact, they may raise them.
If the U.S. government determines that a country is facilitating origin washing, that country could face retaliatory tariffs, leading to broader price increases.
Feldman says Customs and Border Protection (CBP) is watching closely. “They know the algorithms, they know the parameters, they know what’s expected,” he says. Advanced AI and audit tools help detect supply chain inconsistencies, and importers are ultimately liable.
For now, that means most retailers are playing it safe. Countries like Vietnam, South Korea, and Mexico are cooperating with U.S. efforts to crack down. But enforcement takes time, and if illegal transshipment becomes widespread, costs could rise.
The Bottom Line
Place of origin washing isn’t something most consumers will notice at checkout—yet. But it’s shaping the behind-the-scenes strategies of manufacturers and retailers, especially as the U.S. tightens enforcement and tariffs keep climbing.
So what can you do? Pay attention to shifts in delivery times, unexpected price jumps, or limited product availability. Maybe keep some substitute products in mind.
If it seems like your favorite online finds are vanishing or taking longer to arrive, there might be more going on than just a shipping delay.
