The United States has accused 38 countries and the European Union of participating in a “shadow transshipment network” that allegedly circumvents high US tariffs on Chinese goods by routing them through third-party nations. This accusation is detailed in a report titled “The Great Transshipment Scam,” which estimates the potential scale of this activity at around $60 billion, leading to significant losses in US tariff revenue.
The report identifies a wide array of countries and territories, including India, Canada, the European Union, Israel, Japan, Mexico, South Korea, Taiwan, Brazil, Indonesia, 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, as part of this alleged network. It further claims that in 2025, approximately $67 billion worth of goods destined for the US were rerouted from China through key hubs such as Mexico, India, and Vietnam.
The alleged transshipment practices are believed to have resulted in an estimated $28 billion loss in US tariff revenue. Specifically, the report highlights the Pune-Gujarat-Chennai corridor in India as a significant route for Chinese products, such as electric pumps and compressors. This corridor is said to benefit local businesses while imposing increased competitive pressures on manufacturers in the United States.
In response to these findings, the US is considering several measures to address the situation. Proposed actions include the implementation of stricter inspections and interdictions, the imposition of additional tariffs, the application of sanctions, and the potential restriction of market access for countries that are found to be facilitating tariff evasion. These steps aim to curtail the losses and maintain fair trade practices.