White House Exposes $112 Billion Import Gap: Corporate Evasion and Flawed Tariff Policies Hurt U.S. Workers
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The administration reveals that multinational corporations, exploiting transshipment schemes—primarily involving China—are siphoning billions from public coffers. New rules target foreign importers, but critics say systemic issues remain.
On Tuesday, the White House released a damning report exposing a $112 billion discrepancy between shipments reported by China’s customs agency and those recorded by the U.S. Census Bureau. This gap points to widespread tariff evasion enabled by transshipment, where goods are rerouted through over 40 countries to dodge duties. The administration estimates this practice robs the United States of $19 billion to $26 billion in annual tax revenue—funds that could be invested in public services, infrastructure, and social programs. China is identified as the main source, but the real culprits are the multinational corporations and their enablers who exploit global loopholes for profit.
The Office of Trade and Manufacturing Policy acknowledged that this scheme has flourished under the current administration, which, despite maintaining high tariffs on Chinese goods, has failed to address the root causes. The report bluntly states, “While the future may be murky, the past is not,” highlighting how previous neoliberal trade policies created fertile ground for fraud and corporate abuse.
Experts in the industry, such as Ryan Petersen of Flexport, point out that higher tariffs have simply shifted incentives, encouraging importers to misdeclare values, classifications, or countries of origin. Carrie Owens, a former head of Customs and Border Protection’s enforcement division, noted that rising tariff rates have only amplified the problem, showing that punitive trade measures without systemic reform are ineffective.
The report further criticizes the U.S. system that allows foreign 'importers of record'—often shell companies—to file customs entries, making enforcement nearly impossible. In response, the administration issued an executive order on June 3 to limit the use of continuous customs bonds by foreign entities and to demand more detailed documentation. Customs officials are now turning to artificial intelligence to analyze shipment data, but these technological fixes may not address the underlying issues of corporate greed and regulatory capture.
Owens anticipates that the new measures could yield results by October but warns that continued evasion may lead to even higher tariffs, which ultimately burden working people. 'If everybody paid the tariffs they’re supposed to, I personally don’t think the tariffs will be as high as they currently are,' she said—underscoring the need for comprehensive reform to ensure corporations pay their fair share and public resources are protected.