The Trump White House accused China on Thursday of using third countries to disguise the origin of exports and evade U.S. tariffs, estimating the practice costs Washington $19 billion to $26 billion in tariff revenue annually.
White House Maps Global Tariff Evasion Network
The 25-page report, titled “The Great Transshipment Scam,” identifies more than 40 countries with elevated transshipment risk and says Chinese-origin products can be relabeled, repackaged or lightly assembled before entering the United States under a different country of origin. The White House said the estimates are model-based rather than observed losses.
“For years, the great transshipment scam has let communist China launder its exports,” White House trade adviser Peter Navarro said. The report places Canada, the European Union, India, Israel, Japan, Mexico, South Korea and Taiwan in its highest-risk tier while acknowledging legitimate trade.
The administration’s central case assumes $75 billion of annual illegal transshipment. A Commerce Department analysis estimated roughly $67 billion in U.S.-bound goods moved from China through Mexico, India and Vietnam in 2025, resulting in about $28 billion in lost tariff revenue.
Trade Flows Add To Transshipment Concerns
The allegations sharpen concern over supply-chain rerouting. Chinese exports to the U.S. plunged 43% year over year in May 2025 while shipments to Vietnam and Indonesia jumped. Washington later imposed a 40% levy on transshipped goods under its Vietnam trade framework.
Reuters reported direct U.S. imports from China fell to a 16-year low of $308.7 billion in 2025 as imports from Mexico and Vietnam climbed. China’s embassy rejected efforts to target its interests, saying Beijing would “resolutely take necessary measures to safeguard its legitimate rights and interests.”
Trump Turns To AI Enforcement Tools
Trump has continued rebuilding his tariff regime after the Supreme Court struck down parts of his emergency-duty program in February. A report last month revealed that the administration imposed new 10% to 12.5% duties on imports from 60 trading partners.
The White House is also developing an AI-enabled “Detective Border” for Customs and Border Protection to analyze routing histories, cargo images and ownership links. Trump’s June executive order separately tightened importer disclosure and bonding requirements.
“The age of untraceable illegal transshipment is over,” the report said.
The release comes before Chinese President Xi Jinping’s planned September U.S. visit, following May talks that produced new U.S.-China trade and investment boards.
Photo courtesy: miss.cabul / Shutterstock.com
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