The United States has pointed a finger at 38 nations and the European Union, accusing them of participating in a “shadow transshipment network” that allegedly facilitates the entry of Chinese goods into the US market by routing them through intermediary countries to avoid high tariffs. This claim is detailed in a report labeled “The Great Transshipment Scam,” which estimates that the value of potentially illicit transshipment activities could reach approximately $60 billion, leading to substantial losses in US tariff revenue.
The report lists a diverse array of countries and territories implicated in this network. Among them are India, Canada, the European Union, Israel, Japan, Mexico, and South Korea. Others include Taiwan, Brazil, Indonesia, Malaysia, Thailand, Turkey, Vietnam, and Argentina, extending further to Azerbaijan, Bangladesh, Cambodia, Chile, Colombia, Costa Rica, and the Dominican Republic. Additional names include Georgia, Jordan, Kazakhstan, Kenya, Laos, Morocco, Myanmar, Oman, Panama, Peru, the Philippines, Singapore, Sri Lanka, Switzerland, the UAE, and Uzbekistan.
According to the report, in 2025, approximately $67 billion worth of goods destined for the US were allegedly rerouted from China through major transshipment hubs such as Mexico, India, and Vietnam. This practice purportedly contributed to an estimated $28 billion loss in US tariff revenue. The report specifically mentions the Pune-Gujarat-Chennai corridor in India as a notable route where Chinese products, including electric pumps and compressors, have been transshipped, reportedly benefiting local businesses while intensifying competition for US manufacturers.
In light of these findings, the United States has proposed a series of measures to counteract these practices. These measures include implementing more rigorous inspections, enforcing interdiction, imposing additional tariffs, and considering sanctions. Furthermore, the US might restrict market access for countries identified as facilitating tariff evasion, aiming to curb the economic impact of these transshipment activities.