The United States has raised concerns over a network involving 38 countries and the European Union, accused of facilitating a “shadow transshipment network.” This arrangement allegedly allows Chinese goods, which are subject to significant US tariffs, to enter the American market by way of intermediary nations. The report, titled “The Great Transshipment Scam,” suggests that this practice may be circumventing tariffs on Chinese products, potentially resulting in substantial losses of US tariff revenue.
The investigation estimates that the illicit transshipment activities could be valued at approximately $60 billion. Among the named countries are India, Canada, the European Union, Israel, Japan, Mexico, South Korea, Taiwan, Brazil, Indonesia, Malaysia, Thailand, Turkey, Vietnam, and more. It is alleged that these nations are part of a system that enables Chinese goods to bypass US tariffs, thereby affecting the economic landscape and tariff collection.
In 2025, it is projected that goods worth $67 billion were rerouted from China through pivotal hubs such as Mexico, India, and Vietnam, destined for the United States. This maneuver is estimated to have caused a loss of about $28 billion in US tariff revenue. The report underscores the Pune-Gujarat-Chennai corridor in India, noting that Chinese goods like electric pumps and compressors have traveled through this route, not only benefiting local businesses but also heightening competition for US manufacturers.
In response to these findings, the United States is considering several measures to counteract this alleged tariff evasion. These include implementing more rigorous inspections, imposing additional tariffs, and applying sanctions. Moreover, there is a possibility that market access could be restricted for countries found to be contributing to these practices. Such steps aim to fortify the integrity of US tariff regulations and protect domestic industries from unfair competition.
