The United States has pointed fingers at 38 nations and the European Union, accusing them of being participants in a “shadow transshipment network.” This network allegedly facilitates the entry of Chinese goods, which are subject to high U.S. tariffs, into the American market via third-party countries. A report titled “The Great Transshipment Scam” suggests that this potentially illicit activity could have a substantial financial impact, estimating it to be valued at approximately $60 billion. The alleged practice is said to have led to considerable losses in U.S. tariff revenue.
Among the named countries and territories are India, Canada, the European Union, Israel, Japan, Mexico, South Korea, Taiwan, Brazil, Indonesia, Malaysia, Thailand, Turkey, Vietnam, Argentina, Azerbaijan, Bangladesh, Cambodia, Chile, Colombia, Costa Rica, the Dominican Republic, Georgia, Jordan, Kazakhstan, Kenya, Laos, Morocco, Myanmar, Oman, Panama, Peru, the Philippines, Singapore, Sri Lanka, Switzerland, the UAE, and Uzbekistan. These countries are reportedly part of the network that enables such transshipment activities, contributing to the economic ramifications outlined in the report.
The report asserts that in the year 2025, goods valued at roughly $67 billion were allegedly rerouted from China to the United States through significant transit points like Mexico, India, and Vietnam. This maneuver, it is estimated, resulted in a loss of approximately $28 billion in U.S. tariff revenue. The document also draws attention to the Pune-Gujarat-Chennai corridor in India, where it claims Chinese shipments of products, including electric pumps and compressors, have not only bolstered local businesses but also intensified competitive pressures on American manufacturers.
In response to these findings, the U.S. is considering a series of measures to combat the alleged transshipment practices. Proposed actions include implementing stricter inspections and interdiction protocols, imposing additional tariffs, enacting sanctions, and potentially limiting market access for countries deemed to be facilitating tariff evasion. These steps are intended to safeguard U.S. economic interests and address the significant revenue losses attributed to the current transshipment practices.