The United States has leveled accusations against 38 nations and the European Union, claiming they form a “shadow transshipment network” that allegedly facilitates the passage of Chinese goods into the U.S. market, bypassing hefty tariffs. This network reportedly enables the movement of products through intermediary countries, potentially circumventing U.S. trade regulations meant to impose tariffs on Chinese exports.
A report titled “The Great Transshipment Scam” estimates that the illicit transshipment activities might account for approximately $60 billion, leading to significant losses in tariff revenues for the U.S. economy. Among the countries and territories implicated are major players like India, Canada, and the European Union, as well as nations such as Israel, Japan, Mexico, South Korea, and Taiwan. The list extends to include Brazil, Indonesia, Malaysia, Thailand, Turkey, Vietnam, and many others around the globe.
The report details that in 2025, goods valued at around $67 billion, supposedly originating from China, were rerouted through prominent hubs like Mexico, India, and Vietnam before reaching U.S. shores. This practice, it claims, has potentially resulted in an estimated $28 billion loss in tariff revenue for the United States, presenting a significant economic concern.
In particular, the report draws attention to the Pune-Gujarat-Chennai corridor in India. It highlights how Chinese exports, including items like electric pumps and compressors, are allegedly benefiting Indian businesses along this corridor, while simultaneously increasing competitive pressures on American manufacturers.
In response to these findings, the U.S. is considering a series of measures aimed at addressing the alleged tariff evasion. Proposed actions include implementing stricter inspections and interdiction processes, imposing additional tariffs, enacting sanctions, and potentially limiting market access for those countries found to be facilitating these transshipment activities.
