How can I avoid purchasing welding parts that are transshipped from other countries to Vietnam to disguise their origin?

We have seen shipments seized at US Customs because paperwork did not match US Customs ¹ the physical reality of the factory floor. It is a costly nightmare that disrupts production lines and destroys profit margins.

To avoid transshipped welding parts, verify the supplier’s production capacity against their export volume and demand a Certificate of Origin issued by the Vietnam Chamber of Commerce. You must conduct on-site audits to confirm they possess the specific machinery and labor required for substantial transformation, rather than simple assembly.

Let’s examine the specific verification strategies that secure your supply chain against illegal origin fraud.

How do I verify that a supplier in Vietnam is a genuine manufacturer and not just a transshipment hub?

During our site visits in Hai Phong, we sometimes find empty warehouses claiming to produce thousands of tons of metal parts daily. This discrepancy is the first sign of a shell operation.
Verify genuine manufacturing by requesting utility bills and labor records to prove the facility is operational. Cross-reference their machinery list with the specific production steps required for your welding parts. A legitimate factory will show consistent electricity usage and labor costs that align with their claimed output volume.

Verifying a supplier requires looking beyond their website and into the operational data of the facility. A genuine manufacturer in Vietnam must perform "substantial transformation" to qualify for Country of Origin (COO) status. Country of Origin ² This means the product must undergo a fundamental change in form, character, or use within Vietnam. Transshipment hubs, conversely, often import nearly finished goods from China and perform minor tasks like packaging or screwing components together.

Analyzing Utility and Labor Data

One of the most reliable ways we validate a factory is by auditing their utility consumption. Metal fabrication and welding are energy-intensive processes. A facility producing complex geometric structures with a brushed silver finish requires significant electricity to run welding robots, cutting lasers, and polishing machines. welding robots ³ If a supplier claims to manufacture high volumes but their electricity bill resembles that of a small office, they are likely importing finished goods. Similarly, labor records must match the production method. Hand-welding requires a large workforce, while automated systems require skilled technicians.

The Paperwork Trail

Legitimate manufacturers will have a clear paper trail for raw materials. You should demand to see the purchase invoices for the raw steel or aluminum inputs. If the supplier cannot prove they bought raw materials—or if the inputs are semi-finished goods that already look like your final product—they are failing the substantial transformation test. Under the 2025 US-Vietnam trade context, US Customs and Border Protection (CBP) is strictly enforcing these rules to apply the correct tariffs.

What are the red flags indicating that welding parts might be illegally disguised to evade US tariffs?

We frequently warn clients when a new supplier offers prices lower than the raw material costs in Vietnam. Such pricing usually indicates the goods are dumped from a region with state subsidies.
Red flags include prices significantly below local market rates and "Made in Vietnam" labels pasted over other markings. Be wary if a supplier cannot provide traceability documents for raw materials or if their export volume suddenly spikes without a corresponding expansion in their physical facility size or workforce.

Identifying red flags requires a keen eye for details that do not add up. In the current trade environment, with tariffs on transshipped goods hitting 40%, the incentive for fraud is high. However, the signs of evasion are often physical or financial.

Physical Product Inconsistencies

When we inspect samples or first shipments, we look for physical evidence of previous origin. A major red flag is the presence of "ghost markings." This happens when a supplier attempts to remove a "Made in China" engraving and stamp "Made in Vietnam" over it. Sometimes, stickers are simply placed over the original country of origin. Furthermore, the finish of the metal can reveal its source. If you are sourcing a brushed silver finish structure, the specific grain of the brush or the chemical composition of the alloy can act as a fingerprint. If the metallurgical test matches steel commonly produced in Hebei rather than Vietnam's Dung Quat zone, and the supplier cannot explain why, the parts are likely imported.

Economic and Logistical Anomalies

Price is the most obvious indicator. If the cost of the finished welding part is lower than the cost of raw steel in Vietnam, it is economically impossible for it to be made locally without illegal subsidies or dumping. illegal subsidies or dumping ⁴ Additionally, look at the logistics route. A Bill of Lading Bill of Lading ⁵ should show a clear path from the Vietnamese port to the US. If the documentation is convoluted, or if the supplier is hesitant to provide a Certificate of Origin (Form D or Form E) issued by the Vietnam Chamber of Commerce and Industry (VCCI), you are at risk. Vietnam Chamber of Commerce and Industry ⁶

Common Warning Signs Checklist

How can I confirm that the local production capacity matches the volume of parts I am purchasing?

When we manage logistics, we calculate the exact time required to weld each geometric structure to ensure the schedule is realistic. If the math implies 25 hours in a day, we know something is wrong.
Confirm capacity by calculating the theoretical output of their specific welding robots and manual stations against their claimed shifts. Request production logs that track daily throughput. If their total export volume exceeds what their equipment can physically produce in a 24-hour cycle, they are likely supplementing with transshipped goods.

Capacity fraud is a sophisticated form of transshipment where a factory produces some goods legitimately but supplements the volume with imported parts to meet large orders. To catch this, you must treat the factory audit like a math problem.

Calculating Theoretical Throughput

For a product like a complex geometric structure made of rectangular tubes, the bottleneck is usually the welding and finishing process.

1. Identify the Cycle Time: How long does it take to weld one unit? For example, if the frame requires 20 minutes of manual TIG welding and 10 minutes of brushing to achieve the silver finish, the total cycle time is 30 minutes per unit per worker.
2. Count the Stations: If the factory has 10 welding stations and runs two 8-hour shifts, the math is simple.
3. The Calculation: 10 stations × 2 units/hour × 16 hours = 320 units per day.
4. The Comparison: If the supplier promises delivery of 1,000 units per day, they are physically incapable of meeting this demand with their current setup. The remaining 680 units are likely coming from a container hidden in the back lot, imported from a restricted country.

Monitoring IoT and Production Logs

Modern manufacturing often utilizes digital tracking. We encourage checking production logs that track machine uptime. If the welding robots are only active for 4 hours a day welding robots ⁷, but the output claims to be at maximum capacity, the data is being falsified or the goods are not being made there. We also look at consumable usage. Welding wire and shielding gas are consumed at a predictable rate. If a factory exports 50 containers of welded parts but only buys enough gas for 5 containers, they are not doing the welding.

Production Capacity Assessment Table

What specific steps should I take during a factory audit to ensure compliance with Country of Origin rules?

Our team in Vietnam conducts these audits weekly, often finding that paperwork is perfect while the shop floor tells a different story. You must walk the line to see the transformation happen.
During an audit, trace the raw material inventory from the receiving dock to the final packing area. Verify that the "substantial transformation" occurs on-site by witnessing the cutting, bending, and welding processes. Ensure the Certificate of Origin is supported by internal production records, not just import documents.

A factory audit for Country of Origin (COO) compliance is different from a quality audit. In a quality audit, you check if the part fits. quality audit ⁸ In a COO audit, you check where and how the part came into existence. The goal is to prove "Substantial Transformation." substantial transformation ⁹

Step 1: The Raw Material Trail

Start at the warehouse receiving dock. You need to see raw rectangular tubes and sheets, not pre-cut kits. Check the tags on the raw bundles. They should indicate a raw material supplier, often a local Vietnamese steel mill or a legal import source. If the "raw" materials are actually pre-machined kits that only need to be snapped together, the process likely fails the substantial transformation test required by US Customs. The 2025 trade rules are specific: simple assembly does not confer origin.

Step 2: Witnessing the Process

Walk the production line in the order of operations.

1. Cutting/Bending: Watch the raw tubes being cut to size. Check the scrap bins for offcuts. A clean floor with no metal shavings is suspicious.
2. Welding: Observe the welding of the complex geometric structure. Are the jigs and fixtures consistent with the product design?
3. Finishing: The brushed silver finish is a key value-add process. Verify that the polishing or anodizing lines are active. We often see factories with dusty, unplugged finishing machines, which proves the finish was applied elsewhere.

Step 3: Verification of Value-Added Content (VAC)

Vietnamese law and US trade agreements often require a specific percentage US trade agreements ¹⁰ of local value content (often 35-40%). During the audit, review the cost breakdown. You must verify that the labor, overhead, and local materials account for the required percentage of the ex-works price. If the imported components constitute 90% of the value, the product cannot legally be marked "Made in Vietnam."

Audit Checklist for COO Compliance

Conclusion

Protecting your supply chain requires vigilance. By verifying capacity and conducting audits, you ensure your welding parts are compliant and tariff-free. Diligence today prevents customs seizures tomorrow.

Footnotes

1. Official agency enforcing import regulations and seizing non-compliant shipments. ↩︎

2. General background on the legal concept of Country of Origin in international trade. ↩︎

3. Technical specifications for automated welding systems used to calculate production capacity. ↩︎

4. International body regulating anti-dumping and subsidies in global trade. ↩︎

5. Official US agency oversight on ocean-borne transportation and shipping documentation. ↩︎

6. The primary organization in Vietnam for issuing and verifying Certificates of Origin. ↩︎

7. Global authority providing standards and data for industrial robotics in manufacturing. ↩︎

8. International standards for quality management and auditing processes. ↩︎

9. Academic definition and research on economic complexity and manufacturing transformation. ↩︎

10. Official source for the agreements governing tariffs and rules of origin compliance. ↩︎