As U.S. President Donald Trump moves forward with an expanding net of tariffs, including an additional 10% for Chinese imports starting next week, industry insiders and experts say closing existing loopholes and workarounds that companies use to avoid trade taxes is also key.

One practice that so far has helped companies from China — and others — to avoid being hit with tariffs is transshipment, or the transfer of goods to a second country, where the “Made in China” label is switched for another.

Berwick Offray, a ribbon manufacturer in the northeastern state of Pennsylvania, has first-hand experience with the practice. Founded in 1945, the company prides itself on its pledge to keep its products “Made in the USA” and its position as one of the largest manufacturers of ribbons in the world.

Earlier this month, the company sued a U.S. importer, TriMar Ribbon, for allegedly buying ribbons produced in China that were shipped to the United States through India to illegally avoid being subject to tariffs.

Ribbons made in China are cheaper and sold at below market value prices in the United States.

“The current allegations allege that TriMar imported ribbons from China into the United States through transshipment in India, and did not declare the correct country of origin upon entry,” said a notice issued from U.S. Customs and Border Protection, or CBP, when the agency agreed to investigate the case.

Daniel Pickard, an expert on international trade and an attorney at Buchanan Ingersoll & Rooney, which represents Berwick Offray, said there have been numerous cases of transshipment, especially when it comes to products from China.

“We have assisted several clients in submitting allegations to CBP against importers of products that have been transshipped from China through third countries such as Thailand, India and Canada,” Pickard told VOA. “Our clients typically are the U.S. manufacturers of those products that are competing against the Chinese imports that are engaged in evasion of duties.”

According to CBP data, there are currently 221 investigations of Chinese-made products suspected of transshipment tariff evasion.

Tariffs and loopholes

In early February, the Trump administration rolled out 10% blanket tariffs on all Chinese goods. On March 4, Chinese imports will face an additional 10% tariff.

While Trump has worked to reduce potential workarounds, including his executive order on reciprocal tariffs on trading partners, U.S. lawmakers have introduced measures to close the loopholes that would allow Chinese products to evade the president’s increased fees.

Republican Senator Rick Scott introduced the Stopping Adversarial Tariff Evasion Act on Jan. 31, aiming to strengthen enforcement mechanisms to ensure foreign manufacturers comply with customs and duties.

The legislation builds on efforts from Congresswoman Ashley Hinson, who introduced a bill in December intended to hold China accountable for tariff evasion by establishing a task force and reporting mechanisms to deal with instances of financial crime.

Jayant Menon, a senior fellow at the ISEAS Yusof Ishak Institute in Singapore, said the second Trump presidency will foster even more efforts to monitor tariff evasion and inspect products for compliance.

“While it is increasingly difficult to determine where a product is really made these days, given increasing globalization and widespread production under global supply chain, increased scrutiny can help with identifying bypass attempts,” Menon said.

“If bypass attempts are suspected, rightly or wrongly, then the country as a whole may be penalized with new tariffs,” he said.

Pickard said he expects more investigations will be launched by the new administration. He also looks forward to more efforts to counter discriminatory practices affecting U.S. companies.

“We anticipate CBP will increase its enforcement efforts as to the widespread customs fraud involving Chinese products,” he said.

Many stakeholders in the industry, Pickard said, are hoping to see these issues met with criminal prosecutions.