The United States has leveled accusations against 38 countries and the European Union for allegedly being complicit in a “shadow transshipment network” that purportedly facilitates the entry of Chinese goods into the American market, circumventing high U.S. tariffs. A report titled “The Great Transshipment Scam” suggests that this potentially illicit practice could involve goods worth approximately $60 billion, leading to significant U.S. tariff revenue losses.
Among the nations and territories implicated are 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 claims that these regions are part of a network that enables the transshipment of goods from China to the U.S. through third-party countries.
Highlighting specific routes, the report points to the Pune-Gujarat-Chennai corridor in India, which allegedly benefits from Chinese shipments of items like electric pumps and compressors. This corridor is said to have profited from the practice, potentially at the expense of U.S. manufacturers who face increased competitive pressures. In 2025, it is estimated that around $67 billion worth of goods destined for the United States were transshipped via major hubs such as Mexico, India, and Vietnam, possibly resulting in a loss of about $28 billion in U.S. tariff revenue.
To address these concerns, the proposed U.S. response includes measures such as stricter inspections and interdiction processes, the imposition of additional tariffs, sanctions, and possibly restricting market access for countries that are found to facilitate tariff evasion. These steps aim to curb the alleged misuse of transshipment practices that undermine U.S. trade policies and economic interests.