The United States has raised accusations against 38 countries, along with the European Union, for allegedly participating in a “shadow transshipment network.” This network is said to facilitate the entry of Chinese goods, which are subject to high US tariffs, into the American market by rerouting through third countries. A report titled “The Great Transshipment Scam” suggests that this practice could involve around $60 billion worth of potentially illegal transshipment, leading to notable losses in US tariff revenue.
Among the countries identified in the report are India, Canada, the European Union, Israel, Japan, Mexico, South Korea, Taiwan, and Brazil. Other nations include Indonesia, Malaysia, Thailand, Turkey, Vietnam, and Argentina, along with Azerbaijan, Bangladesh, Cambodia, Chile, Colombia, Costa Rica, and the Dominican Republic. The list also features Georgia, Jordan, Kazakhstan, Kenya, Laos, Morocco, Myanmar, Oman, Panama, Peru, the Philippines, Singapore, Sri Lanka, Switzerland, the UAE, and Uzbekistan.
The report estimates that in 2025, goods worth approximately $67 billion were allegedly transshipped from China to the US through key hubs like Mexico, India, and Vietnam. This activity may have led to an estimated $28 billion in lost tariff revenue for the United States. The document highlights specific regions, such as the Pune-Gujarat-Chennai corridor in India, where Chinese shipments of products like electric pumps and compressors are reportedly benefiting local businesses while increasing competition for US manufacturers.
In response to these findings, the US is considering a series of measures aimed at curbing this practice. Proposed actions include implementing stricter inspections and interdiction processes, imposing additional tariffs, and potentially enforcing sanctions. Furthermore, the US may contemplate restricting market access for countries that are found to facilitate tariff evasion.