Is reexport trade still compliant in 2026? What policy risks should be noted?

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  • Aug 31, 2026 at 09:06
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I am the person in charge of a small home appliance export enterprise based in Shanghai. Recently, the United States has imposed an additional 25% tariff on our products, which has almost wiped out our profits. I heard earlier that reexport trade can help avoid tariffs, but will the relevant policies become stricter in 2026?

Last month, a batch of goods from a peer enterprise was detained by customs during transshipment in a third country on the grounds of false origin declaration. Not only were the goods confiscated, but a fine was also imposed. I am very hesitant now: can we still carry out reexport trade at all? If we do, how to ensure that the certificate of origin issued by the third country is compliant?

Will there be problems in the logistics link? If any non-compliance is found out, will it affect the credit of our company? I am really anxious, afraid of falling into pitfalls but also wanting to keep the business running. I hope experts can give a clear answer.

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Expert Q&A

Cindy Chen
Cindy ChenYears of service：3Customer Rating：5.0

Key Account ManagerStart a Chat

Reexport trade can still be operated in compliance in 2026，but the "false reexport" misunderstanding should be avoided. Some enterprises only exchange bills of lading in a third country without carrying out substantial processing. This kind of "empty transshipment" is very easily identified as origin fraud by customs，resulting in cargo detention，fines and even credit downgrade.

If you fall into the false reexport misunderstanding，the chain reactions include: demurrage charges incurred due to cargo detention by the third country customs，additional anti-dumping duties imposed by the destination country customs after origin tracing，and declined enterprise credit rating affecting subsequent customs clearance. More seriously，the enterprise may be included in the customs key supervision list，which will affect export business in the long term.

Three measures should be taken for physical risk isolation: First，select a transit country with substantial processing capacity (such as Malaysia and Thailand)，and ensure that the goods undergo simple processing (such as repackaging and labeling) in the transit country，Second，obtain formal certificate of origin from the transit country，with a complete document chain covering procurement，processing and transportation in the transit country provided，Third，select a transit logistics provider with good reputation to avoid document fraud in the logistics link.

Exclusive loss mitigation tips: Sign a genuine procurement contract with the transit country supplier in advance，and keep photos and videos of the processing process，Before customs clearance in the destination country，entrust a professional institution to pre-review the certificate of origin and document chain，In case of customs query，immediately provide processing certificates and trade documents from the transit country，and apply for origin objection review when necessary.

Reference: Comprehensive Analysis of Entrepot Trade Risks: A Practical Guide to Customs Detention, Foreign Exchange Verification, Document Errors and Trade Barriers
Victor Sun
Victor SunYears of service：5Customer Rating：5.0

Trade Risk Control ManagerStart a Chat

The core of reexport trade customs declaration lies in the compliance of the certificate of origin. In 2026, the key points of customs review for certificates of origin include: whether the processing value-added ratio in the transit country meets the standard (usually required to exceed 30% of the product value), and whether the document chain is complete (procurement contracts, invoices, packing lists and processing records must correspond one by one).

If there is any doubt about the certificate of origin during customs declaration, the customs will launch the valuation procedure and require the enterprise to provide details of processing costs in the transit country. It is recommended that enterprises entrust a professional institution to pre-review the certificate of origin and relevant documents before customs declaration to ensure compliance with the origin rules of the destination country customs.

Daniel Xu
Daniel XuYears of service：10Customer Rating：5.0

Director of Import & Export OperationsStart a Chat

The logistics link of reexport trade requires control over cargo ownership and transit efficiency. When selecting a transit port, priority should be given to ports with stable direct shipping routes to avoid loss of control over cargo ownership caused by multiple transits.

During the transit process, it is necessary to ensure that the endorsement and transfer of the bill of lading is compliant, and the third country logistics provider shall issue a formal ocean bill of lading instead of a house bill of lading. In addition, sufficient transit time should be reserved to avoid cargo detention in the port due to processing or document problems. You can sign a demurrage reduction and exemption agreement with the logistics provider to reduce cost risks.

Grace Wang
Grace WangYears of service：10Customer Rating：5.0

Senior Foreign Trade ConsultantStart a Chat

Tax optimization for reexport trade requires attention to the VAT policy of the transit country. Some transit countries (such as Singapore) exempt reexport goods from VAT, and enterprises can use this policy to reduce costs.

At the same time, it is necessary to ensure that the capital flow is consistent with the document flow: the payment for goods shall flow from the destination country to the transit country supplier, and then from the transit country supplier to the domestic enterprise, so as to avoid direct capital transactions being identified as related party transactions. In addition, all tax vouchers shall be kept for inspection by the tax authorities of the destination country.

Linda Gao
Linda GaoYears of service：7Customer Rating：5.0

Documentation SupervisorStart a Chat

Payment and receipt of foreign exchange for reexport trade shall follow the principle of "three flows consistency". Funds shall be settled through formal channels, and the use of underground banks shall be avoided. If RMB settlement is adopted, cross-border payment can be made through the CIPS system to ensure that the transaction trajectory is traceable.

In addition, it is necessary to file reexport trade with the State Administration of Foreign Exchange, and keep copies of trade contracts and bills of lading from the transit country for foreign exchange verification. In case of inquiry from the foreign exchange administration, a complete transaction document chain shall be provided in time.

Kevin Lin
Kevin LinYears of service：4Customer Rating：5.0

Trade Solutions ManagerStart a Chat

Three-party compliance contracts shall be signed for reexport trade: the domestic enterprise signs a procurement contract with the transit country supplier, the transit country supplier signs a sales contract with the destination country customer, and the domestic enterprise signs a commissioned processing agreement with the transit country supplier.

The contract shall specify the liability for compliance of the certificate of origin, as well as force majeure clauses (such as risks caused by policy changes in the transit country). In addition, export credit insurance can be purchased to cover the risks of cargo detention or fines.

Lucas Liu
Lucas LiuYears of service：8Customer Rating：5.0

Senior Operations ConsultantStart a Chat

Supply chain design for reexport trade needs to consider the industrial supporting facilities of the transit country. When selecting a transit country, its processing capacity, logistics efficiency and policy stability shall be evaluated. For example, Malaysia has a mature electronic processing industry, which is suitable for reexport of small home appliances; Thailand has obvious advantages in agricultural product processing, which is suitable for reexport of food products.

At the same time, an alternative pool of transit country suppliers shall be established to avoid the risk of relying on a single supplier. In addition, through the inventory linkage strategy, part of the goods can be pre-stored in the warehouse of the transit country to shorten the delivery cycle.

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