Washington: The United States has put more than 40 countries and trading partners under scrutiny over concerns that Chinese goods could be passing through third countries to bypass American tariffs.
India, Canada, the European Union, Taiwan, Mexico, Japan, South Korea and Vietnam are among the economies identified in a new White House report examining the risks associated with what US officials describe as illegal transshipment.
The report, titled “The Great Transshipment Scam,” also outlines plans to use artificial intelligence and advanced data analysis to help US authorities identify shipments that may be concealing their actual country of origin.
White House Targets Transshipment Practices
The report was prepared by Peter Navarro, a senior trade adviser to President Donald Trump, and focuses on the growing concern over the movement of Chinese-made products through third countries before they reach the US market.
Transshipment itself is a legitimate part of international trade. However, US officials are concerned about cases where goods are allegedly processed, repackaged, relabeled or routed through another country primarily to make them appear to have originated there and avoid higher US tariffs on Chinese imports.
According to the report, the practice became more prominent after Washington imposed Section 301 tariffs on Chinese products in 2018 during Trump’s first administration.
The White House argues that some Chinese companies have increasingly relied on countries with lower production costs, preferential access to the US market, free-trade zones or less stringent customs controls to redirect products.
India Among Countries Highlighted
India is specifically mentioned in the report in connection with industrial supply chains.
The document refers to the Pune-Gujarat-Chennai manufacturing corridor while discussing the movement and processing of products such as pumps and compressors. The US administration says such supply-chain arrangements could potentially allow Chinese-origin products to enter American markets after undergoing processing elsewhere.
The report groups the countries it identifies according to their potential exposure to transshipment risks. It also acknowledges that much of the trade involving these economies is legitimate and that the presence of Chinese-linked supply chains does not by itself indicate wrongdoing.
Billions of Dollars in Goods Under Scrutiny
The scale of potential tariff-evasion activity could be substantial, according to the report.
The White House estimates that the annual value of goods potentially involved in illegal transshipment could range from approximately $40 billion to $303 billion, with the wide range reflecting differences in methodology and definitions.
US officials say such practices can undermine tariff policy by allowing products subject to higher duties to enter the country through alternative routes.
US Plans AI-Based Border Monitoring
Artificial intelligence is expected to become an important part of Washington’s response.
The White House says it is working with US Customs and Border Protection on an AI-enabled system that could help identify shipments with unusual or potentially suspicious trade patterns.
The system is expected to draw on information such as shipping records, routing histories and other trade-related data to assess whether goods may have been redirected to conceal their original source.
The move comes as the Trump administration seeks to strengthen enforcement of its tariff regime through technology and data-driven monitoring.
China Supply Chains Face Increased Scrutiny
The issue of Chinese goods being routed through other countries has been a concern for US policymakers since the trade conflict between Washington and Beijing intensified in 2018.
The subsequent restructuring of global supply chains led several countries, particularly in Southeast Asia, to attract companies looking to diversify production away from China.
Vietnam, among others, emerged as a significant destination for companies seeking alternative manufacturing locations.
With the Trump administration continuing to expand its tariff policies, the latest White House report indicates that US trade enforcement could increasingly focus not only on direct imports from China but also on international supply chains connected to Chinese manufacturers.
The report’s findings could therefore have implications for exporters and manufacturers across Asia and other major US trading partners as Washington steps up efforts to determine the true origin of imported goods.
