EU Strengthens Oversight Amid Rising Trade Diversion Risks
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The European Union (EU) is tightening import controls on several key products originating from China, such as steel, electronics, solar panels, and wind turbines.
This move comes as the EU grows increasingly cautious about the potential diversion of Chinese goods previously exported to the United States, following the latest rounds of tariff retaliation between the two major economies.
According to Ms. Nguyễn Thị Hoàng Thuý, Head of the Vietnam Trade Office in Sweden, the EU is closely monitoring imports of these items amid concerns that surplus Chinese production could be redirected to Europe.
“EU officials have acknowledged that high U.S. tariffs may lead to surplus capacity, causing goods once exported to the U.S. to shift toward Europe,” Ms. Thuý said.
“Some EU policymakers warn of a possible trade diversion effect, and affirm that the EU will be ready to defend its markets if necessary.”
Historical Context: Lessons from the 2017 Steel Surge
The situation recalls 2017, when the U.S. closed its market to Chinese steel, resulting in a sudden surge of imports into the EU.
At that time, the EU implemented WTO-approved safeguard measures to restrict imports and stabilize its internal market after volumes spiked unexpectedly.
Today, with U.S. tariffs once again reshaping trade flows, similar concerns are re-emerging—particularly in sectors such as steel and renewable energy technology.
Risks for Vietnamese Exporters: Origin Fraud and Reputation Damage
Ms. Thuý warned that Vietnamese exporters of similar goods must pay close attention to the risk of “origin fraud”, where Chinese goods are rerouted through Vietnam to benefit from EVFTA tariff preferences when re-exported to the EU.
“If such incidents occur, the reputation of ‘Made in Vietnam’ goods could be seriously damaged,” she emphasized.
“The EU may respond by tightening inspection procedures, withdrawing preferential treatment, or even imposing punitive tariffs on Vietnamese exports.”
Expert Recommendations for Vietnamese Businesses
To minimize risks and maintain export credibility, trade experts advise Vietnamese enterprises to:
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Strengthen supply chain control – Ensure traceability and transparency throughout sourcing and production.
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Maintain clear origin documentation – Keep verifiable records to prove genuine Vietnamese origin during customs inspections.
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Monitor EU trade policy updates – Stay informed of new regulations or safeguard measures that could impact specific product categories.
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Enhance competitiveness – Focus on quality improvement and added value rather than price competition alone.
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Comply strictly with EVFTA rules of origin – Avoid any involvement with transshipment or re-labelling of goods from third countries.
Conclusion: Safeguarding “Made in Vietnam” Integrity
As the EU tightens import controls to prevent trade distortion, Vietnamese exporters must uphold transparency and compliance.
Protecting the integrity of the “Made in Vietnam” brand is not only essential for market access but also for maintaining long-term trust in the EU’s high-value markets.