White House officials warned Thursday that the United States has uncovered a massive transshipment network, in which dozens of nations—including Canada, India, Mexico, Japan and South Korea—have helped China avoid far‑reaching tariffs imposed during Donald Trump’s administration. The report argues that Chinese exporters have moved goods through these third countries, repackaged them and made legal arguments that the origin remained Chinese, thereby securing lower duties and saving tens of billions of dollars in costs.
“We’ve seen a great transshipment scam, where China is taking advantage of the global shadow transshipment network to continue to skirt duties by using third‑country routing,” the White House said. The White House adviser Peter Navarro added that the scheme has cost American jobs and “billions in revenue.”
In a counter‑statement, the Chinese embassy in Washington said the U.S. tariff measures were “unilateral” and that the use of state power to target Chinese companies had no winners. The embassy added that “any unilateral action or agreement concerning transshipped goods must not target or harm the interests of third parties.”
The White House estimates that $30 bn to $300 bn of goods have been rerouted through the lower‑tariff countries, and it says that artificial‑intelligence tools have been deployed to intercept future transshipment attempts. The claims come as the U.S. prepares for a September meeting between Trump and Chinese leader Xi Jinping—just weeks after the administration has launched additional sanctions dealing with everything from humanoid robot restrictions to tighter limits on drone exports.
Economists say the new findings could help Washington strengthen its bargaining position, forcing China to address not only direct Chinese exports but also third‑country routing that may be crucial to the supply chains of many other economies. However, the White House warns that the full extent of the transshipment network is still unclear and that U.S. enforcement will continue.
