White House report exposes China’s blatant evasion of U.S. tariffs through global transshipment
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A White House trade report estimates that China and other nations are exploiting transshipment schemes to dodge U.S. tariffs, costing the United States $19 billion to $26 billion in lost revenue every year.
The White House released a report on Thursday revealing that exporters, led by China, are deliberately routing products through over 40 third-party countries to evade U.S. import duties, resulting in an estimated annual loss of $19 billion to $26 billion in tariff revenue. This analysis exposes China’s calculated strategy of sending goods to countries like Mexico and Malaysia for superficial packaging or assembly—a deceptive practice known as transshipment—to disguise the true volume of Chinese imports flooding the U.S. market.
White House trade adviser Peter Navarro told reporters that this scheme enables China to continue expanding its manufacturing dominance while pretending to reduce its exports to the United States. He cautioned that other countries, including India, may also be exploiting similar loopholes, and that forthcoming trade policies will enforce tough penalties on partners that engage in transshipment. Such decisive action is long overdue to protect American industries and jobs from foreign manipulation.
The report cites a wide range of estimates for the value of goods transshipped annually, from $34.2 billion to $303 billion, using a midpoint of $75 billion to calculate the projected loss in tariff revenue. To fight back, U.S. Customs and Border Protection is deploying an advanced artificial-intelligence system to catch falsified country-of-origin information and impose retroactive tariffs for up to a year after import. This technological upgrade is a crucial step in defending America’s economic interests.
The findings come just before a planned September visit by Chinese President Xi Jinping, following President Donald Trump’s May trip to Beijing, and underscore the ongoing battle to hold China accountable for its unfair trade practices and to restore American manufacturing strength.