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White House reports $19B-$26B in annual tariff losses due to transshipment scam
The White House has released a report detailing what it calls the ‘Great Transshipment Scam,’ alleging that exporters are using approximately 40 countries to reroute goods and evade US tariffs. The report claims that these practices, which involve minimal processing or repackaging in third-party nations, primarily benefit China by allowing products to enter the US market at lower tariff rates.
Estimates regarding the scale of this activity vary significantly. The White House central case assumes $75 billion in transshipped goods annually, resulting in an estimated $19 billion to $26 billion in lost tariff revenue. However, other estimates cited in the report range from $34 billion to as high as $303 billion in total transshipped value. The report also suggests these practices result in $19 billion to $26 billion in lost federal tax receipts due to decreased domestic economic activity.
In response, U.S. Customs and Border Protection is deploying artificial intelligence tools, including a system referred to as ‘Detective Border,’ to analyze container markings and X-ray imagery to detect discrepancies. The Chinese Embassy in Washington has expressed opposition to the measures, stating that trade wars have no winners and that unilateral actions should not harm third-party interests.
Entities
China · Peter Navarro · U.S. Customs and Border Protection · United States · White House
Claims
What the coverage asserts, and how well corroborated each claim is across sources.
- [● 2 SOURCES] U.S. Customs and Border Protection is deploying AI tools, including a system named ‘Detective Border’, to detect suspicious transshipment by analyzing container markings and X-ray imagery. cn.dailyeconomic.com · www.chinesepress.com
- [● 3 SOURCES] The White House report identifies a phenomenon called the ‘Great Transshipment Scam’ where exporters evade US tariffs by rerouting goods through third-party countries. www.alliansfriheten.se · cn.dailyeconomic.com · www.chinesepress.com
- [● 3 SOURCES] The White House identifies approximately 40 countries at high risk of facilitating illegal transshipment of goods. www.alliansfriheten.se · cn.dailyeconomic.com · www.chinesepress.com
- [● 3 SOURCES] The value of rerouted goods is estimated to range from $34 billion to as high as $303 billion annually. www.alliansfriheten.se · cn.dailyeconomic.com · www.chinesepress.com
- [● 2 SOURCES] Annual lost tariff revenue is estimated between $19 billion and $26 billion based on a central case of $75 billion in transshipped goods. www.alliansfriheten.se · cn.dailyeconomic.com
- [● 2 SOURCES] The Chinese Embassy in Washington opposes US tariff measures and any unilateral actions that target third parties or damage their interests. cn.dailyeconomic.com · www.chinesepress.com