Moody's Ratings issued a report on Tuesday, October 21, 2025, highlighting potential major compliance challenges for companies in India and the ASEAN region stemming from a proposed 40% US trans-shipment tariff. The report suggests that sectors such as machinery, electrical equipment, and semiconductors are at high risk. The lack of clarity on how the US administration will define 'trans-shipment' is a key concern, as a broad interpretation could be economically damaging for the Asia-Pacific supply chain. The report indicates that the tariff appears to target products originating in China that are shipped through third countries with lower tariffs. Exporters may face increased due diligence and certification requirements to prove that their products have undergone 'substantial transformation' to avoid penalties. This analysis from Moody's comes as companies navigate an already complex global trade environment.