Chinese exporters are increasingly rerouting shipments throughout Southeast Asia to mitigate US tariffs, sparking considerable shifts in global trade lanes and necessitating adaptations for maritime logistics worldwide.
US Census Bureau figures highlight a glaring 43 per cent year-on-year (YoY) drop in direct Chinese exports to the US in May 2025, representing a plunge worth $15 billion, reported the Financial Times.
China’s overall exports, however, rose by 4.8 per cent over the same period, compounded by a 15 per cent climb in trade with the ASEAN bloc and a 12 per cent increase to EU signatories. Figures depicting the trans-shipment hubs across Southeast Asia reflect a concerted effort to redirect Chinese-origin goods bound for Western markets, according to the Financial Times.
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Vietnam has proved to be a critical conduit. $3.4 billion in Chinese exports were rerouted through Vietnam in May, according to consultancy Capital Economics, a 30 per cent YoY spike. Indirect trade via Indonesia climbed in tandem by 25 per cent, or roughly $800 million.
These figures sparked a reactionary trade deal between Vietnam and the US Government this past week that imposed a 40 per cent tariff on trans-shipped goods, a move widely perceived as stifling these indirect Chinese exports, the Financial Times claimed. Additional levies may be introduced once Trump’s reciprocal tariff freeze ends on 9 July, with increased duties scheduled to come into force in August, according to US Treasury Secretary Scott Bessent.
“We saw this during the first US-China trade war,” said Mark Williams, chief Asia economist at Capital Economics. “There was a fairly immediate shift. US imports from China dropped off, but they picked up from Vietnam and Mexico.”
While such reroutes are primarily centred around circumventing tariffs, regional port activity has subsequently been reshaped, with Southeast Asian ports witnessing increased container throughput, reported the Financial Times.
India is also emerging as a new export hub. According to the Financial Times, Indian outbound shipments to the US rose 17 per cent in May, driven in part by increased electronics trade. Imports from China and Hong Kong into India rose 22.4 per cent, suggesting that Chinese parts are being assembled in India before being re-exported, further complicating origin tracking and tariff enforcement.
“India’s import surge in electronics and machinery, much of it from China, and rising exports to the US suggest that global supply chains are adapting [to the tariffs] quickly,” said Ajay Srivastava, founder of the Global Trade Research Initiative.
The shifting trade landscape has also rippled into the Gulf. Chinese exports to the UAE jumped 20 per cent in May, equivalent to $1.1 billion, with regional ports in the Middle East assuming positions as de facto beneficiaries from China’s alternative end markets for goods no longer reaching the US.
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“China is targeting other markets for its goods and demand in this region, which has a growing population, a strong investment programme, and little indigenous manufacturing, remains high,” said Monica Malik, chief economist at Abu Dhabi Commercial Bank.
Meanwhile, in Europe, increased maritime imports from China indicate a redirection of excess capacity. Despite this, European Commission officials await further data before confirming long-term trends, reported the Financial Times.
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The growing use of third countries to reroute Chinese exports is creating logistical hurdles for shipping lines, port operators, and customs authorities, as trans-shipment routes become increasingly complex and harder to track. With more US tariffs expected and global trade regulations tightening, this shift toward indirect routing is likely to continue, further transforming global maritime trade patterns.
