The United States has raised allegations against 38 countries along with the European Union, accusing them of being involved in a “shadow transshipment network.” This network is purportedly enabling Chinese goods, which are subject to hefty US tariffs, to circumvent these duties by entering the American market via third-party nations.
A detailed report, titled “The Great Transshipment Scam,” suggests that these potentially unlawful transshipment activities could be valued at approximately $60 billion. The report indicates that this practice has led to considerable losses in US tariff revenue. Among the countries and territories implicated are India, Canada, the European Union, Israel, Japan, Mexico, and South Korea, among others, including Taiwan, Brazil, Indonesia, Malaysia, and several more from various regions.
The document points out that in 2025, goods worth about $67 billion, intended for the US, were allegedly rerouted from China through major transit points such as Mexico, India, and Vietnam. This practice is estimated to have resulted in a loss of around $28 billion in US tariff revenue. The report further draws attention to the Pune-Gujarat-Chennai corridor in India, where it claims that Chinese shipments, particularly of products like electric pumps and compressors, have bolstered local businesses there while simultaneously increasing competitive pressure on American manufacturers.
In response to these allegations, the US is considering a series of measures. These include implementing more stringent inspections and interdictions, imposing additional tariffs, enacting sanctions, and potentially limiting market access for countries that are found to facilitate tariff evasion. These proposed actions aim to curb the practice and recover lost revenue.