The United States has raised allegations against 38 countries and the European Union for creating a “shadow transshipment network” that purportedly enables Chinese goods, subject to elevated US tariffs, to infiltrate the American market via intermediary nations. This claim is detailed in a report titled “The Great Transshipment Scam,” which assesses that such potentially unlawful transshipment activities could be worth an estimated $60 billion, leading to substantial deficits in US tariff revenue.
The report identifies a diverse array of countries and territories implicated in this practice, including but not limited to India, Canada, the European Union, Israel, Japan, Mexico, South Korea, Taiwan, Brazil, and Indonesia. Others named are Malaysia, Thailand, Turkey, Vietnam, 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.
According to the findings, approximately $67 billion worth of goods intended for the US market were allegedly rerouted from China through key transit points like Mexico, India, and Vietnam in 2025. This deceptive maneuver is estimated to have inflicted a loss of about $28 billion in US tariff revenues. The report further elaborates on the Pune-Gujarat-Chennai corridor in India, suggesting that Chinese shipments, specifically of products like electric pumps and compressors, have not only bolstered businesses along this corridor but have also intensified competitive pressure on American manufacturers.
In response to these revelations, the US is contemplating a series of measures aimed at curbing this alleged tariff evasion. Proposed actions include implementing more rigorous inspections and interdiction processes, imposing additional tariffs, enacting sanctions, and potentially limiting market access for nations that are found to be facilitating these transshipment activities. These steps are intended to safeguard US economic interests and ensure compliance with its tariff regulations.