THE United States seems to be labouring under a misapprehension that the rules-based international trade system is one big scam.

On Thursday, Aug 13, the White House’s Office of Trade and Manufacturing Policy released The Great Transshipment Scam, a report accusing 40 countries of participating in an elaborate scheme to evade US tariffs by falsifying the origin of goods. The report divides the world into a threetier network allegedly conspiring to route “Chinese goods” into the United States.

Nine Asean member states are included in this narrative. Malaysia, together with Vietnam, Thailand, and Indonesia, is placed in “Tier 2” — described as economies “deeply integrated into China’s supply chains.” The report claims these countries combine “significant illegal transshipment volumes” with close links to China’s manufacturing and logistics networks. Singapore, Laos PDR, Cambodia, Myanmar, and the Philippines are placed in “Tier 3,” labelled as “weaklink jurisdictions” with free zones, lowcost labour, or limited customs enforcement.

Let’s be clear, under WTO rules, transshipment is lawful. Goods routinely move through multiple countries as part of modern supply chains — and Malaysia has long been a trusted, rulesabiding hub in that system. Our network of bilateral and regional trade agreements was built precisely to strengthen supply chain resilience. Our ports, logistics networks, and manufacturers operate within international rules, and we have every right to expect that this lawful trade is recognised and respected.

WTO rules also draw a crucial distinction. Rules of origin (ROO) determine where a product is truly “from,” and they hinge on substantial transformation — whether a product undergoes a meaningful change in form, use, or value. Malaysian factories assemble, process, and manufacture goods in ways that meet international standards for substantial transformation. That is legitimate trade, not circumvention.

What is not legitimate is tariff evasion: routing goods through third countries, falsifying origin claims, or performing only trivial processing to avoid another country’s tariffs. Malaysia does not condone such practices. Our authorities have consistently acted to uphold the integrity of our export ecosystem. But we must defend ourselves when foreign enforcement measures blur the line between lawful transshipment and unlawful evasion.

Malaysia must not accept any framework that mischaracterises our industries, imposes undue burdens, or treats legitimate supply chain activity as suspicious by default. Cooperation is possible — Malaysia has demonstrated that time and again — but cooperation must be grounded in mutual respect, clear evidence, and recognition of our sovereign right to protect legitimate commerce.

This new categorisation of Malaysia must be addressed directly and confidently. We welcome engagement that is transparent, datadriven, and consistent with international rules. But we must reject measures that conflate legal transshipment with illegal circumvention. Such conflation harms our exporters, distorts perceptions of our supply chains, and undermines confidence in the rulesbased trading system. Our manufacturers comply with rules of origin. Our factories perform substantial transformation. Our supply chains are legitimate.

Malaysia must engage constructively and counter these allegations with verifiable data and evidence, fully appreciating the impact of foreign enforcement actions on our economy and our industries. We must stand firm for fair treatment, lawful trade, and a global trading system where compliance is recognised — and sovereignty respected.

Tan Sri Dr Rebecca Fatima Sta Maria is former secretary-general of the then Ministry of International Trade and Industry, Malaysia. The opinions expressed are her own.