# US allegations of Chinese tariff evasion via transshipment

> Live situation record from CLSTR: https://clstr.news/situations/us-allegations-of-chinese-tariff-evasion-via-transshipment
> Updated: 2026-08-14T03:38:39.000Z. Sources: 97. Developments: 2.

The United States administration has released a report titled ‘The Great Transshipment Scam,’ alleging that China is utilizing a ‘shadow transshipment network’ to evade U.S. tariffs. The report identifies approximately 40 countries—including India, Mexico, Canada, Japan, South Korea, and the European Union—as facilitators that allow Chinese goods to be re-labeled, re-packaged, or minimally processed to disguise their origin.

Estimates regarding the scale of this practice vary. The White House estimates annual U.S. tariff revenue losses between $19 billion and $26 billion, with the potential to displace up to 450,000 U.S. jobs. While some assessments place the annual value of illegal transshipment between $40 billion and $303 billion, the report provides a central case estimate of $75 billion, with the total value of goods involved potentially ranging from $34.2 billion to $303 billion annually.

The report categorizes risk levels, specifically designating major trading partners such as Mexico and Canada as ‘Tier 1’ due to their proximity to U.S. borders and high volumes of China-linked goods. Tier 2 includes countries with significant economic integration with China, such as Brazil, Indonesia, Malaysia, Thailand, Turkey, and Vietnam. The report also identifies a Tier 3 consisting of smaller economies, such as Chile, which may serve as ‘opportunistic targets.’

To combat these activities, the U.S. Customs and Border Protection agency plans to deploy artificial intelligence tools to detect cargo mismatches through X-ray imaging, container markings, and packaging pattern analysis. The Trump administration has also indicated intentions to implement penalties for trade partners found to be facilitating such evasion.

## Claims

- The White House estimates annual tax revenue losses of $19 billion to $26 billion due to tariff evasion. (corroborated by 30 sources)
- Annual transshipped goods are estimated to be worth between $34.2 billion and $303 billion. (corroborated by 30 sources)
- The practice of illegal transshipment involves re-labeling, re-packaging, or minor processing to evade tariffs. (corroborated by 28 sources)
- The White House report identifies approximately 40 countries as having an elevated risk of facilitating illegal transshipment. (corroborated by 20 sources)
- China is routing exports through more than 40 countries to avoid U.S. tariffs. (corroborated by 19 sources)
- The accused strategy involves performing final assembly or processing in third-party countries to bypass U.S. tariffs. (corroborated by 16 sources)
- Illegal transshipment could result in an annual economic impact exceeding $70 billion to $75 billion to the United States. (corroborated by 14 sources)
- The report, titled ‘The Great Transshipment Scheme’, classifies countries into three distinct levels of connection to China. (corroborated by 13 sources)
- Brazil is classified as a ‘Level 2’ country with ‘Significant Economic Integration’ regarding transshipment risks. (corroborated by 11 sources)
- The Trump administration plans to include penalties for trade partners that facilitate tariff evasion. (corroborated by 11 sources)
- The U.S. Customs and Border Protection agency is now deploying AI tools to better detect suspected transshipment of goods. (corroborated by 9 sources)
- The central $75 billion case translates to some 450,000 U.S. jobs displaced. (corroborated by 8 sources)
- Trade advisor Peter Navarro stated the practice represents losses of tens of billions of dollars for the United States. (corroborated by 5 sources)
- The company Exiger estimated US$ 75 billion in illegally transshipped goods occurred between February 2025 and February 2026. (corroborated by 3 sources)

## Timeline

### 2026-08-14: United States accuses India of helping China evade tariffs

The U.S. has accused India and 40 other nations of operating a ‘shadow transshipment network’ to help China evade tariffs through re-labeling and re-routing goods.

2 sources. https://clstr.news/cluster/united-states-accuses-india-of-helping-china-evade-tariffs

### 2026-08-13: White House report identifies 40 countries facilitating Chinese tariff evasion

A White House report accuses China of using a network of over 40 countries to evade U.S. tariffs through illegal transshipment, potentially costing the U.S. billions in revenue and 450,000 jobs.

95 sources. https://clstr.news/cluster/trump-white-house-reports-19b-26b-annual-tariff-revenue-loss

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Cite as: US allegations of Chinese tariff evasion via transshipment. CLSTR, https://clstr.news/situations/us-allegations-of-chinese-tariff-evasion-via-transshipment