- A White House report claims the U.S. loses tens of billions of dollars in annual revenue and hundreds of thousands of jobs to illegal transshipments, largely involving Chinese goods rerouted through Southeast Asia and other markets.
- The White House stated that more than 40 countries have helped China sidestep US tariffs by routing exports through nations that face lower American import duties.
- White House trade adviser Peter Navarro stated that it has cost American jobs and billions in revenue.
- A spokesperson for the Chinese embassy in Washington responded that 'trade wars have no winners' and opposes US tariff measures.
- The report is expected to add to key sticking points between the sides as Trump and Xi prepare to meet in the US in September.
- According to government and private sector estimates quoted by the White House, between $30bn and roughly $300bn in goods have been moved from countries with higher tariffs through those with lower rates.
- The US accused China of 'taking advantage' of the practice by moving goods through nations that have lower duties.
- The White House described the process as 'fraud cloaked in paperwork', stating that China has used third countries as a stopover and has repackaged goods to hide their real origin to obtain lower tariffs.
- The White House noted that what has changed in today's Great Transshipment Scam is the speed and scale of this modern form of smuggling, as well as the breadth, depth, and sophistication of the global Shadow Transshipment Network.
- The US has deployed artificial intelligence (AI) tools to catch transshipment efforts.
A White House report has highlighted a significant economic issue, revealing that the U.S. loses between $30 billion and $300 billion annually due to illegal transshipments of Chinese goods. These goods are rerouted through over 40 countries, including Canada, India, and Mexico, to evade tariffs.12689
The report describes this operation as the 'Great Transshipment Scam', where China exploits nations with lower import duties to bypass U.S. tariffs. White House trade adviser Peter Navarro emphasized that this practice has cost American jobs and billions in revenue, stating, "What has changed in today's Great Transshipment Scam is not merely the speed and scale of this modern form of smuggling, but the breadth, depth, and sophistication of the global Shadow Transshipment Network through which China's tariff evasion now moves."3
The U.S. government has accused China of “taking advantage” of this practice, with the report detailing how goods are repackaged to obscure their origins, a process described as “fraud cloaked in paperwork.” In response, a spokesperson for the Chinese embassy stated that “trade wars have no winners” and opposed U.S. tariff measures, asserting that unilateral actions must not harm third parties.4
To combat this issue, the U.S. has begun deploying artificial intelligence (AI) tools to detect and prevent transshipment efforts, aiming to protect its economic interests and uphold fair trade practices.10
“The White House estimates $30bn to $300bn in goods were moved through lower-tariff nations, calling it 'fraud cloaked in paperwork.' China's embassy responded that 'trade wars have no winners,' and the report adds friction ahead of Trump-Xi talks in September.”
BBC
