The United States has accused a group of 38 countries and the European Union of facilitating a network designed to bypass high US tariffs on Chinese goods. Dubbed the “shadow transshipment network,” this alleged scheme allows Chinese products to reach American markets by routing them through various third countries. According to the report titled “The Great Transshipment Scam,” this potentially illegal practice might be valued at approximately $60 billion, leading to substantial losses in US tariff revenue.
The report identifies a wide array of nations and territories involved in this network, including 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 countries are alleged to be part of a system that enables Chinese goods to enter the US while avoiding the intended impact of tariffs.
In 2025 alone, the report claims that approximately $67 billion worth of goods destined for the United States were rerouted through major hubs such as Mexico, India, and Vietnam. This transshipment might have resulted in an estimated $28 billion in lost tariff revenue for the US. The document further highlights the role of the Pune-Gujarat-Chennai corridor in India, suggesting that Chinese shipments of items like electric pumps and compressors have bolstered local businesses there while simultaneously increasing competition for US manufacturers.
In response to these allegations, the United States is contemplating several countermeasures. Proposed actions include more rigorous inspections and interdiction processes, the imposition of additional tariffs, the enforcement of sanctions, and the potential restriction of market access for countries found to be aiding in tariff evasion. These measures aim to curb the economic impact of the alleged transshipment network and protect US revenue from tariff evasion practices.