United States accuses India of helping China evade tariffs

The United States has accused India and approximately 40 other nations of participating in a ‘shadow transshipment network’ that allows China to bypass American tariffs. According to a report titled ‘The Great Transshipment Scam’ by Peter Navarro, the President’s trade and manufacturing advisor, China utilizes these third-party countries to legitimize its exports through minor processing, re-labeling, re-packaging, re-invoicing, or routing changes.

Navarro stated that this practice has become increasingly common since 2018, following the implementation of Section 301 tariffs against China for unfair trade practices. The report suggests that Chinese state-supported manufacturers exploit regions with low labor costs, weak customs oversight, or favorable trade access to the U.S. to move goods. The estimated annual value of this illegal transshipment is placed between $40 billion and $303 billion.

In response to these activities, the U.S. administration plans to utilize artificial intelligence (AI) to detect and take action against such shipments. Other major trading partners mentioned as being part of this network include Canada, Mexico, the European Union, Japan, and South Korea.