A White House report released Thursday accuses more than 40 countries of helping China dodge President Trump's tariffs by letting Chinese goods pass through their ports on the way to the United States, disguised along the way as their own exports.
The 25-page report, titled "The Great Transshipment Scam," was produced by the White House Office of Trade and Manufacturing Policy, run by trade adviser Peter Navarro. It names Canada, India, Japan, South Korea and Mexico among the countries it says have "helped China evade tens of billions of dollars in tariffs," alongside a separate cluster of nine Latin American nations — Panama, Colombia, Brazil, Argentina, Chile, Peru, Costa Rica, the Dominican Republic and Mexico — flagged as elevated-risk transshipment routes.
How the scheme works, and what it costs
Transshipment routes goods through an intermediary country before they reach the U.S., sometimes with enough relabeling, repackaging or limited finishing work to make Chinese-made products appear to originate elsewhere and qualify for a lower tariff. The White House called it "fraud cloaked in paperwork" and said the practice has grown in "breadth, depth, and sophistication" since Trump's tariffs took effect. Estimates cited in the report vary widely: the administration put lost annual tariff revenue at $19 billion to $26 billion, while government and private-sector figures it quoted for the value of rerouted goods span a much broader $30 billion to roughly $300 billion. A separate Commerce Department analysis, reported alongside the release, put transshipment through Mexico, India and Vietnam alone at about $67 billion in goods and $28 billion in foregone tariffs — a reminder that the numbers behind the scam remain rough estimates rather than an audited tally.
Navarro said the practice has cost "American jobs and billions in revenue." The report says U.S. Customs and Border Protection has begun deploying artificial-intelligence tools to flag suspicious shipping routes and origin claims, though it offers few specifics on new penalties or trade actions against the countries named.
China's embassy in Washington pushed back, with a spokesperson telling reporters that "trade wars have no winners" and that Beijing opposes both the U.S. tariff measures and the use of "state power" to target Chinese companies. "Any unilateral actions or agreements concerning transshipped goods must not target or harm the interests of third parties," the spokesperson added — a pointed warning to the countries named in the report.
The report lands weeks before Trump is due to meet Chinese leader Xi Jinping in Washington in September, and trade watchers see it as leverage. Chang Pao Li, an economist at Singapore Management University, told the BBC that Washington "can argue that China has preserved access to the US market indirectly," meaning any broader settlement with Beijing may need to address third-country routing as well as direct exports — a position that could put fresh pressure on the dozens of governments named in the report as the two sides head toward the negotiating table.
