The United States has raised allegations against 38 countries along with the European Union for being part of a so-called “shadow transshipment network.” This network, according to U.S. claims, facilitates the entry of Chinese goods into the American market through third-party countries, effectively bypassing the high tariffs imposed by the U.S. on China. A report titled “The Great Transshipment Scam” estimates that this potentially illegal practice could be valued at approximately $60 billion, leading to significant losses in U.S. tariff revenue.
The list of implicated countries and territories includes 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. The report suggests that in 2025, an estimated $67 billion worth of goods bound for the U.S. were allegedly rerouted from China through major hubs such as Mexico, India, and Vietnam, potentially resulting in a loss of around $28 billion in U.S. tariff revenue.
One area highlighted in the report is the Pune-Gujarat-Chennai corridor in India. It claims that Chinese shipments of products, including electric pumps and compressors, have not only benefited businesses along this Indian corridor but have also increased competitive pressures on American manufacturers.
In response to these findings, the U.S. is considering implementing stricter measures. Proposed actions include enhanced inspections, interdiction efforts, additional tariffs, sanctions, and possibly restricting market access for countries that are found to be facilitating tariff evasion.