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Exporters from India, ASEAN may be hit by US transshipment tariff: Moody’s
- IBJ Bureau
- Oct 22, 2025
A 40 per cent transshipment tariff by the US will create major compliance issues for companies in India and the ASEAN region, with high risks for sectors like machinery, electrical equipment and semiconductors, Moody’s Ratings has said.
In July, US President Donald Trump had announced a 40 per cent tariff on goods deemed to have been transshipped beyond the broader country-level tariffs.
In its Trade Asia-Pacific report, Moody's has said that it remains unclear how the Trump administration defines transshipment, but the measures appear to target products originating in China and shipping through third countries with lower tariffs.
Stating that lack of clarity around transshipment tariff poses risks to ASEAN economies, Moody’s has noted that if the US maintains a narrow interpretation targeting only goods imported from China, minimally processed or re-labelled and re-exported to the US, the economic impact on regional economies may be limited.
However, a broader and more punitive interpretation where goods with any significant Chinese input are also deemed in violation could prove economically damaging for the Asia-Pacific (APAC) supply chain, Moody’s has added.
The transshipment tariff will likely create major compliance issues for ASEAN’s private sector. For example, there will likely be increased due diligence and certification requirements, with exporters needing to prove “substantial transformation” to avoid US penalties, it has said.
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