The United States has raised allegations against 38 countries along with the European Union, accusing them of participating in a “shadow transshipment network.” This network is purportedly facilitating the entry of Chinese goods into the U.S. market by rerouting them through third-party countries to avoid high American tariffs. A document, titled “The Great Transshipment Scam,” estimates the value of these potentially unlawful shipments to be approximately $60 billion, highlighting the substantial loss in U.S. tariff revenue as a result of these activities.
In the report, a diverse group of countries and territories are named, including India, Canada, the European Union, Israel, Japan, and Mexico, among others, such as South Korea, Taiwan, Brazil, Indonesia, Malaysia, Thailand, Turkey, and Vietnam. The list extends to Argentina, Azerbaijan, Bangladesh, Cambodia, Chile, Colombia, Costa Rica, the Dominican Republic, Georgia, Jordan, Kazakhstan, Kenya, Laos, Morocco, Myanmar, Oman, Panama, Peru, the Philippines, Singapore, Sri Lanka, Switzerland, the UAE, and Uzbekistan.
The report suggests that in the year 2025, around $67 billion worth of goods intended for the U.S. may have been illicitly redirected from China via major transit points like Mexico, India, and Vietnam. It further estimates that such activities could potentially result in a loss of about $28 billion in U.S. tariff revenue. The document emphasizes the impact of these practices, citing the Pune-Gujarat-Chennai corridor in India as a critical pathway where Chinese products like electric pumps and compressors are allegedly benefiting local businesses, thereby intensifying competition for U.S. manufacturers.
In response to these findings, the U.S. is considering a series of stringent measures to curb such practices. Proposed actions include implementing more rigorous inspections and interdictions, imposing additional tariffs, and enacting sanctions. Additionally, the U.S. may contemplate restricting market access for countries that are found to be facilitating tariff evasion, as part of its strategy to protect domestic industries and recover lost tariff revenues.