The United States has leveled accusations against 38 countries and the European Union, alleging their involvement in a “shadow transshipment network” that facilitates the entry of Chinese goods into the American market, bypassing high US tariffs. This network allegedly allows these goods to be routed through third-party countries to avoid the tariffs. A report titled “The Great Transshipment Scam” sheds light on the scale of this issue, estimating potentially illegal transshipment activities to be valued at approximately $60 billion, with significant losses in US tariff revenue as a consequence.
The report identifies several countries and territories as part of this network, including nations such as India, Canada, Mexico, and Vietnam, alongside regions like the European Union and territories like Taiwan. Among other countries named are Israel, Japan, South Korea, and several others from across the globe, such as Brazil, Indonesia, Thailand, and Turkey. According to the report, a staggering $67 billion worth of US-bound goods were allegedly rerouted from China through major transshipment hubs, notably Mexico, India, and Vietnam, during the year 2025. This activity is estimated to have cost the US about $28 billion in lost tariff revenue.
One specific corridor that the report highlights is the Pune-Gujarat-Chennai corridor in India. The report claims that Chinese shipments, particularly of products like electric pumps and compressors, have not only provided a boost to businesses along this corridor but have also intensified competitive pressures on American manufacturers. This practice has raised concerns over the economic impact on the United States, particularly its manufacturing sector.
In response to these findings, the US is considering a series of stringent measures to combat this alleged tariff evasion. Proposed actions include implementing more rigorous inspections and interdictions, imposing additional tariffs, and potentially enacting sanctions. Moreover, there is a consideration to restrict market access for those countries found to be aiding in the evasion of US tariffs, as a means to safeguard the American economy and ensure fair trade practices.