The United States has leveled accusations against 38 countries and the European Union, claiming they are part of a “shadow transshipment network” that purportedly facilitates the entry of Chinese goods—subject to elevated US tariffs—into the American market through intermediary nations. A newly released report, “The Great Transshipment Scam,” estimates that this potentially illicit practice could involve as much as $60 billion, resulting in substantial losses in US tariff revenue.
The report identifies numerous countries and territories as participants in this network, including 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. The document suggests that approximately $67 billion worth of goods destined for the US may have been rerouted through major transit points such as Mexico, India, and Vietnam in 2025, potentially leading to an estimated $28 billion in lost tariff revenue for the United States.
A specific focus of the report is the Pune-Gujarat-Chennai corridor in India, where it claims that Chinese shipments of products like electric pumps and compressors have supported local businesses while simultaneously increasing competition for American manufacturers. This corridor is highlighted as a significant component of the alleged transshipment route, underscoring the broader economic implications of the practice.
In response to these findings, the US is considering a range of measures to combat the alleged transshipment activities. Proposed actions include implementing stricter inspections and interdiction procedures, imposing additional tariffs, enacting sanctions, and possibly restricting market access for countries implicated in facilitating tariff evasion. These measures aim to protect US revenue and ensure fair trade practices are upheld.