The United States has raised allegations against 38 countries and the European Union, accusing them of involvement in a “shadow transshipment network.” This network reportedly enables Chinese products, which are subject to steep US tariffs, to penetrate the American market by passing through intermediary nations. A recent publication, titled “The Great Transshipment Scam,” suggests that this potentially illicit activity could be valued at approximately $60 billion, leading to considerable losses in US tariff income.
The report highlights a list of implicated countries and regions, naming entities such as 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. These regions are identified as participants in the alleged transshipment scheme that facilitates the entry of Chinese goods into the US.
According to the findings, a significant portion of goods, valued at approximately $67 billion, destined for the US market were reportedly rerouted from China through key nodes such as Mexico, India, and Vietnam in 2025. This redirection of goods is estimated to have caused about $28 billion in losses to US tariff collections. The report specifically points to the Pune-Gujarat-Chennai corridor in India, where it claims that Chinese shipments of items like electric pumps and compressors have not only bolstered local enterprises but also heightened competition for American manufacturers.
In response to these findings, the US is contemplating a series of stringent measures. These include tougher inspection and interdiction processes, the imposition of additional tariffs, sanctions, and possibly limiting market access for nations that aid in tariff avoidance. The proposed actions highlight the gravity with which the US views these alleged transshipment activities and the economic impact they pose.