The United States has identified 38 countries and the European Union as part of what it calls a “shadow transshipment network,” which allegedly facilitates Chinese goods subject to high U.S. tariffs entering the American market through intermediary nations. A recent report, “The Great Transshipment Scam,” suggests that this potentially illegal practice could involve around $60 billion worth of goods, leading to significant losses in U.S. tariff revenue.
The report lists several countries and regions implicated in these activities, including India, Canada, the European Union, Israel, Japan, Mexico, South Korea, Taiwan, Brazil, Indonesia, Malaysia, Thailand, Turkey, Vietnam, Argentina, Azerbaijan, Bangladesh, Cambodia, Chile, Colombia, Costa Rica, the Dominican Republic, Georgia, Jordan, Kazakhstan, Kenya, Laos, Morocco, Myanmar, Oman, Panama, Peru, the Philippines, Singapore, Sri Lanka, Switzerland, the UAE, and Uzbekistan. It alleges that around $67 billion worth of products bound for the U.S. were transshipped from China through major hubs like Mexico, India, and Vietnam in 2025, potentially resulting in about $28 billion in lost tariff revenue for the United States.
The report highlights specific routes, such as the Pune-Gujarat-Chennai corridor in India, where Chinese exports like electric pumps and compressors are said to have bolstered local businesses while exerting competitive pressure on U.S. manufacturers. This practice, according to the report, undermines the U.S. economy by allowing goods to circumvent the tariffs intended to protect American industries.
In response to these findings, the U.S. is considering a range of measures. Proposed actions include more stringent inspections and interdictions, additional tariffs, and sanctions. There is also the possibility of restricting market access for countries that are found to be facilitating tariff evasion, thereby ensuring compliance with U.S. trade regulations.