Made in Vietnam: The trade spat between Washington and Beijing has prompted companies to shift business from China (Manan VATSYAYANA)

Hanoi (AFP) – Hanoi has vowed to crack down on manufacturers illegally using “Made in Vietnam” labels on items destined for America to dodge punishing tariffs as the US-China trade spat drags on.

Exporters have started shifting production from China to Vietnam to avoid 25 percent levies imposed by US President Donald Trump on $200 billion worth of Chinese goods. 

But Hanoi said some manufacturers are illegally claiming their goods — including textiles, seafood and agricultural products — are from Vietnam when in fact they originate in China. 

The trend has “affected the reputation of Vietnamese businesses and goods”, said Vietnam’s Deputy Prime Minister Pham Binh Minh, quoted in an official report published Sunday on the government website.  

“We will increase the punishment to deter cases of goods claiming to be Vietnamese goods entering other markets,” he added, according to the report. 

The report said Vietnamese customs officials had uncovered dozens of cases of incorrectly labelled goods destined for the United States, Europe and Japan. 

The government called for more stringent inspection of exports to those markets and said Vietnam could be punished by the US — one of its leading trade partners — if it failed to stem the problem.

Vietnam has long been a manufacturing hub for cheaply-made goods from Adidas sneakers and H&M dresses to Samsung smart phones and Intel processors. 

Those exports have soared this year as Beijing and Washington have escalated tit-for-tat tariffs on billions of dollars worth of goods. 

In the first three months of this year, US imports from Vietnam reached nearly $16 billion, up 40 percent from the same period last year, according to US trade data. 

Nearly half of all American companies working in China have said they are considering shifting production from the so-called ‘Factory of the World’ as a result of the trade dispute, according to a poll by the American Chamber of Commerce in China.

Trump raised the tariffs last month after trade talks broke down, prompting Beijing to retaliate with higher duties on $60 billion worth of American products.

Disclaimer: Validity of the above story is for 7 Days from original date of publishing. Source: AFP.