The United States has leveled accusations against 38 countries and the European Union, implicating them in a “shadow transshipment network” that allegedly allows Chinese goods, subject to hefty US tariffs, to bypass these duties by entering the American market through intermediary nations. This claim is outlined in a report titled “The Great Transshipment Scam,” which estimates that such potentially illegal activities could be valued at around $60 billion, significantly impacting US tariff revenue.
The report identifies a broad range of nations and territories involved in this network, listing names such as India, Canada, the European Union, and others including Israel, Japan, Mexico, South Korea, Taiwan, Brazil, and Indonesia. Additional countries named are Malaysia, Thailand, Turkey, Vietnam, and Argentina, among others. Collectively, they are accused of facilitating the movement of approximately $67 billion worth of goods, originally from China, to the US market via major hubs like Mexico, India, and Vietnam in the year 2025. This maneuver is estimated to have led to a loss of around $28 billion in US tariff revenue.
The report further highlights specific areas of concern, such as the Pune-Gujarat-Chennai corridor in India. It suggests that Chinese shipments, particularly of products like electric pumps and compressors, have not only boosted local businesses along this corridor but also intensified competitive pressure on US manufacturers.
In response to these findings, the United States is considering a series of measures aimed at curbing this transshipment activity. Proposed actions include tightening inspections, implementing stricter interdictions, imposing additional tariffs, and enacting sanctions. Moreover, there is the possibility of restricting market access for countries that are found to be facilitating these tariff evasion practices.
