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As U.S. duties and new tariffs imposed on Chinese quartz surface products and other Chinese products remain in place, Chinese exporters and other Chinese Companies in Southeast Asia (who are actually supplying the Chinese products and doing the illegal transshipment) are now aggressively promoting Delivered Duty Paid (DDP) deals to U.S. buyers. They promise to handle all import duties while offering prices that seem untouched by tariffs.
But behind these enticing quotes lies a web of illegal practices that may expose American companies to serious customs violations, financial losses, and even legal consequences under federal law.
The New Playbook: How the DDP + Under-Invoicing Scheme Works?
According to recent investigations by CNBC and Vietnamese outlet Soha News, many Chinese exporters offer DDP terms not out of generosity, but as a strategic tool to facilitate customs fraud.
Here’s how the scheme works:
- The Pitch: U.S. buyers are told that the Chinese supplier will handle all import taxes and duties. The all-in DDP price reflects significant cost savings, sometimes barely above pre-tariff levels.
- The Fraud: To enable these low prices, Chinese exporters undervalue cargo on shipping documents, under-reporting product prices by 30–70%. Some also misclassify products to take advantage of lower-duty categories.
- The Shell Game: These shipments are processed through third-party freight forwarders or shell companies, which act as the importer of record—the legal entity responsible for all customs declarations and payments.
- The Bond Loophole: U.S. law requires each importer to secure a minimum $50,000 customs bond as a guarantee to pay duties. If the shell company fails to pay, the bond covers it—once.
- The Reset: After defaulting, the shell company disappears, and a new one is set up to continue the cycle. Meanwhile, the original U.S. buyer enjoys “cheap” landed costs—until customs catches on.
Who’s Really at Risk? The American Buyer
Although the shell company is technically responsible for customs compliance, the U.S. government increasingly looks beyond paperwork to investigate the entire supply chain—including the end buyer.
Here’s what experts are saying:
“It’s a horrible game for U.S. businesses complicit in this scheme, as they could face substantial liability under the customs law and other laws like the False Claims Act.”
— Trade compliance attorney, quoted in CNBC
“There’s no way an American company that had been paying $20 for products, paid only $25 when there was a double-digit tariff.”
— Lenny Harris, Trade Lawyer
If your supplier offers to “take care of customs” and your invoice still reflects pre-tariff pricing, there’s a high chance the shipment is part of a fraudulent customs declaration. And ignorance is no longer a valid defense.
The Consequences: Not Just Delays—But Federal Liability
While it might seem like a foreign problem, the legal burden doesn’t lie with the seller. **Under U.S. customs law and the False Claims Act, the importer of record—**your business—is ultimately responsible for the accuracy of import documentation. If your supplier falsifies invoice values and your company accepts them, you could face:
- Retroactive tax bills
- Shipment seizure
- Hefty financial penalties
- Long-term audits and reputational damage
Worse yet, claiming ignorance is no longer a reliable defense. As Harris warns, businesses still paying “pre-tariff” prices should know better—“It is a horrible game,” he says, and one that’s no longer going unnoticed by U.S. Customs.
How to Stay Protected: Smart Sourcing Starts with Compliance
Now more than ever, U.S. buyers must treat sourcing decisions as compliance decisions. Here’s how to protect your business:
- Avoid too-good-to-be-true DDP deals, especially from high-risk regions
- Work only with suppliers who provide true-value invoices and verified origin documents
- Demand transparency on freight, insurance, duties, and customs processes
- Shift sourcing to compliant manufacturing hubs like Vietnam, which offer both competitive pricing and trusted export practices
Why Ethical Sourcing Is the Smarter Long-Term Strategy
In contrast to high-risk sourcing practices, working with export partners who follow global trade regulations ensures peace of mind. Countries like Vietnam have emerged as trustworthy alternatives to China, especially in manufacturing industrial materials, furniture, stone surfaces, and plastics.
At VinaQuartz & DragonQuartz, we work exclusively with U.S. buyers who require complete documentation transparency and legal compliance. Our shipments are backed by:
- True-value commercial invoices with no hidden adjustments
- Verified Vietnam-origin certificates to avoid transshipment risks
- Strict adherence to U.S. import standards in labeling and packaging
- 21+ years of proven export experience across the U.S., Canada, and Europe
We don’t believe in shortcuts. We believe in supply chains built on trust, legality, and long-term partnership.
Final Thoughts: Choose Transparency Over Risk
With U.S. Customs enforcement becoming increasingly aggressive, the risks of importing from non-compliant suppliers are rising sharply. As global trade regulations tighten, the most valuable asset your business can have is a transparent, compliant, and ethical supplier.
If you’re looking to shift your sourcing away from risky territories—or want to ensure your current supply chain won’t cost you in the long run—our team is here to help.
📩 Contact us today to learn how our export solutions from Vietnam can support your business with security, stability, and compliance.