The United States has raised serious allegations against 38 countries along with the European Union, accusing them of participating in a “shadow transshipment network.” This network is purportedly allowing Chinese goods, which are subject to steep US tariffs, to enter the American market via third-party countries. A detailed report titled “The Great Transshipment Scam” estimates that this potentially unlawful transshipment activity could be valued at around $60 billion, leading to considerable losses in US tariff revenue.
Countries highlighted in the report include a diverse array of nations and territories such as India, Canada, Japan, Mexico, and South Korea, as well as regions like the European Union. Others named are Taiwan, Brazil, Indonesia, Malaysia, Thailand, Turkey, and Vietnam, along with Argentina, Azerbaijan, Bangladesh, Cambodia, and Chile. The list extends to Colombia, Costa Rica, the Dominican Republic, and Georgia, with additional mentions of Jordan, Kazakhstan, Kenya, Laos, Morocco, Myanmar, Oman, Panama, Peru, the Philippines, Singapore, Sri Lanka, Switzerland, the UAE, and Uzbekistan.
The report claims that approximately $67 billion worth of goods bound for the US were allegedly rerouted from China through significant hubs such as Mexico, India, and Vietnam in the year 2025. This activity is estimated to have resulted in a loss of about $28 billion in US tariff revenue. A highlighted area of concern is the Pune-Gujarat-Chennai corridor in India, where the report alleges that Chinese shipments of items like electric pumps and compressors have provided benefits to local businesses while exerting competitive pressure on American manufacturers.
In response to these findings, the US is considering several measures to curb these practices. Proposed actions include implementing stricter inspections and interdictions, imposing additional tariffs, enacting sanctions, and possibly limiting market access for countries that are found to facilitate tariff evasion. These steps aim to address the financial impact and competitive challenges posed by the alleged transshipment activities.