# US-China tariff evasion via transshipment

> Live situation record from CLSTR: https://clstr.news/situations/us-china-tariff-evasion-via-transshipment
> Updated: 2026-08-13T17:53:17.000Z. Sources: 28. Developments: 2.

The White House has released reports detailing what trade adviser Peter Navarro described as a “great transshipment scam,” in which Chinese goods are routed through more than 40 third-party countries to evade U.S. tariffs. These methods include re-labeling, re-packaging, or minor processing in nations such as Mexico, Canada, India, Japan, and South Korea.

In a report titled ‘The Great Transshipment Scam,’ the administration identified a ‘Shadow Transshipment Network’ and categorized at-risk nations into three tiers. Tier 1 includes major economies like the European Union, India, and Taiwan; Tier 2 includes nations integrated into Chinese supply chains such as Brazil, Indonesia, Malaysia, Thailand, Turkey, and Vietnam; and Tier 3 includes smaller economies like Chile and the Dominican Republic.

Initial estimates suggested annual U.S. tax revenue losses between $19 billion and $26 billion, with rerouted goods valued between $34.2 billion and $303 billion. Subsequent reporting expanded the scope of the economic impact, citing potential annual losses of $70 billion to $75 billion, a possible $150 billion reduction in U.S. GDP, and the loss of approximately 450,000 jobs. The administration also noted that tariff revenue losses specifically could range from $19 billion to $34 billion.

In response, the administration is developing an artificial intelligence-driven detection system to monitor supply chains. Future trade frameworks may also include provisions to penalize partner nations found to be facilitating such evasion. These findings arrive ahead of a scheduled visit by Chinese leader Xi Jinping to the United States in September.

## Claims

- The White House identified more than 40 countries associated with a high risk of illegal transshipment of Chinese-linked goods. (corroborated by 12 sources)
- Major facilitators of Chinese transshipment include Mexico, Canada, the European Union, India, Japan, and South Korea. (corroborated by 10 sources)
- The practice of illegal transshipment involves re-labeling, re-packaging, or minor processing to evade tariffs. (corroborated by 8 sources)
- The White House estimates annual tax revenue losses of $19 billion to $26 billion due to tariff evasion. (corroborated by 7 sources)
- Annual transshipped goods are estimated to be worth between $34.2 billion and $303 billion. (corroborated by 7 sources)
- The Trump administration plans to include penalties for trade partners that facilitate tariff evasion. (corroborated by 7 sources)
- Illegal transshipment could result in an annual economic impact exceeding $70 billion to $75 billion. (corroborated by 4 sources)
- The illegal transshipment of goods could lead to a loss of approximately 450,000 jobs in the United States. (single source)
- The U.S. administration is developing an AI-driven detection frontier to identify goods attempting to bypass tariffs. (single source)

## Timeline

### 2026-08-13: White House identifies 40+ countries at risk of illegal Chinese goods transshipment

The White House identified over 40 countries, including Mexico and Canada, at high risk of facilitating illegal Chinese goods transshipment to evade U.S. tariffs, impacting the economy by up to $75 billion.

12 sources. https://clstr.news/cluster/united-states-identifies-mexico-as-high-risk-country-for-illegal-transshipment

### 2026-08-13: White House reports $19B-$26B annual revenue loss from Chinese tariff evasion

The White House reports that China is using transshipment through over 40 countries to evade U.S. tariffs, causing an estimated $19 billion to $26 billion in annual revenue losses.

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

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Cite as: US-China tariff evasion via transshipment. CLSTR, https://clstr.news/situations/us-china-tariff-evasion-via-transshipment