The White House released a 25-page report Thursday highlighting concerns over foreign exporters routing goods through third countries to avoid U.S. tariffs. The report, titled “The Great Transshipment Scam,” identified more than 40 countries, including China, Panama, Mexico, and Colombia, as high-risk for transshipment.
Transshipment involves shipping goods through intermediary nations before they reach the United States, often to qualify for lower tariffs or mask the product’s origin. The report notes that China offers the most developed example of this practice. Following the implementation of Section 301 tariffs on Chinese goods in 2018, U.S. trade deficits with China decreased in 2019 and 2020. However, Chinese exporters increasingly routed goods through third countries, the report says, with products relabeled or reprocessed to appear as originating elsewhere.
The White House estimates that tariff-avoidance transshipment costs the U.S. Treasury between $19 billion and $26 billion annually. The report credits efforts by the Trump administration to strengthen enforcement against transshipment, including the use of artificial intelligence by Customs and Border Protection to detect such practices.
Officials also warn that other countries, such as India, could exploit transshipment to bypass tariffs. The report cites estimates that the value of goods transshipped annually to avoid tariffs ranges from $34.2 billion to $303 billion. U.S. officials plan to include provisions in future trade agreements to penalize countries engaging in transshipment fraud.
The report was released ahead of a planned September visit to Washington by Chinese President Xi Jinping, following President Donald Trump’s trip to Beijing in May. Fox News Digital reached out to the White House for comment.
Jon Ross Myers is the executive editor and publisher of the Mississippi News Network, Mississippi's largest digital only media company. He can be reached at editor@tippahnews.com
