The United States has accused a group of 38 countries and the European Union of being part of a covert network that facilitates the entry of Chinese goods into the US market, circumventing high tariffs. This alleged system of transshipment is detailed in a report titled “The Great Transshipment Scam,” which suggests that this activity could be responsible for an estimated $60 billion in trade, leading to substantial losses in US tariff revenue.
The report identifies a wide range of countries and territories implicated in this network. The list includes major global players like India, Canada, the European Union, Japan, Mexico, South Korea, and Brazil, as well as other nations such as Indonesia, Malaysia, Thailand, Turkey, Vietnam, and many more. The alleged transshipment activities, according to the report, have led to significant financial impacts, with a particular focus on the potential loss of $28 billion in tariff revenue due to the rerouting of goods originally from China.
Significant hubs for this alleged activity are cited in the report, particularly pointing to Mexico, India, and Vietnam. The report estimates that in 2025 alone, approximately $67 billion worth of goods destined for the US were rerouted through these nations. Such practices have reportedly created competitive challenges for US manufacturers, especially highlighted in the Pune-Gujarat-Chennai corridor in India, where Chinese products like electric pumps and compressors are said to bolster local businesses while putting pressure on American counterparts.
In response to these findings, the US is considering a series of measures aimed at curbing this practice. Proposed actions include more stringent inspections and interdiction processes, the imposition of additional tariffs, and the application of sanctions. Furthermore, the US is contemplating restricting market access for those countries that are found to be facilitating the evasion of tariffs, as a means to protect its economic interests and ensure compliance with trade regulations.