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US targets transshipment network
The Trump administration accused more than 40 countries, including India, of helping China evade steep American tariffs through what it called a “shadow transshipment network,” and it released a 25-page report titled “The Great Transshipment Scam.”
“The United States has accused more than 40 countries, including India”
White House trade adviser Peter Navarro said the practice “let “Communist China launder its exports through more than 40 countries.””
The report said the annual value of illegally transshipped goods ranged from USD 40 billion to USD 303 billion depending on methodology and definition, and it described Chinese goods being relabeled, repackaged, reinvoiced, or routed through third countries to create the appearance of a different country of origin.
The White House said it plans to use an artificial intelligence tool named “Detective Border” to help identify goods that reach the US after passing through third countries, drawing on shipment records, routing history, product classification, ownership links, production capacity, anomaly detection and computer vision.
AI enforcement and diplomatic pushback
The BBC reported that the White House said the named countries included Canada, India, Mexico, Japan and South Korea, and that it had cost “American jobs and billions in revenue,” as White House trade adviser Peter Navarro described the impact.
In response to BBC queries, a spokesperson for the Chinese embassy in Washington said, “trade wars have no winners” and that it opposes the US' tariff measures and the use of state power to target China's companies.
The White House said the report’s estimates are model-based rather than observed losses, and it described the process as “fraud cloaked in paperwork” while adding that it has deployed artificial intelligence (AI) tools to catch transshipment efforts.
Benzinga reported that the administration’s central case assumes $75 billion of annual illegal transshipment, while a Commerce Department analysis estimated roughly $67 billion in U.S.-bound goods moved from China through Mexico, India and Vietnam in 2025, resulting in about $28 billion in lost tariff revenue.
What’s at stake for trade
The White House report said the “Great Transshipment Scam” extends beyond China by identifying more than 40 economies with elevated risks, including Canada, the European Union, India, Japan and South Korea, and it said transshipment can involve minor processing, relabeling, repackaging, reinvoicing and changes to shipping documentation.
“affect about 450,000 jobs”
The report also warned that future trade agreements and tariff arrangements may come with tougher rules governing the origin of goods, because Washington is signaling it wants to distinguish legitimate manufacturing and substantial transformation from pass-through trade and origin shifting.
Aju Press reported that under the White House’s central scenario of $75 billion in annual illegal transshipment, the report estimates displacement of U.S. production could affect about 450,000 jobs, reduce annual GDP by between $113 billion and $150 billion, and cut federal revenue by $19 billion to $26 billion.
The report’s enforcement focus is tied to “Detective Border,” which the White House described as comparing customs declarations with broader trade data to identify inconsistencies in a shipment's stated origin, route and components, as it prepares to add another layer to its tariff crackdown ahead of President Donald Trump’s meeting with Chinese leader Xi Jinping in Washington.
