The United States has leveled accusations against 38 countries and the European Union, asserting that they form part of a “shadow transshipment network” that facilitates the entry of Chinese goods into the U.S. market, circumventing high tariffs. This practice allegedly involves routing goods through third countries, resulting in substantial losses in tariff revenue for the U.S. The report, “The Great Transshipment Scam,” estimates the value of these potentially illicit activities at approximately $60 billion.
The report identifies a broad range of countries and territories implicated in this network, naming India, Canada, Japan, Mexico, South Korea, and many others across Asia, Europe, and the Americas. It highlights that about $67 billion worth of goods destined for the U.S. were allegedly rerouted from China through significant transshipment hubs such as Mexico, India, and Vietnam in 2025, leading to an estimated $28 billion in lost tariff revenue.
Particular focus is given to the Pune-Gujarat-Chennai corridor in India, where Chinese shipments of electric pumps and compressors are said to have bolstered local businesses while simultaneously heightening competitive pressure on American manufacturers. This corridor is highlighted as a significant channel through which the transshipment occurs, benefiting from the alleged tariff evasion.
In response to these revelations, the U.S. is considering a range of measures to combat and deter such activities. Proposed actions include intensifying inspections and interdictions, imposing additional tariffs, applying sanctions, and potentially restricting market access for countries identified as facilitating tariff evasion. These steps aim to safeguard U.S. economic interests and ensure compliance with its trade regulations.