The United States has identified 38 countries and the European Union as participants in what it describes as a “shadow transshipment network.” This network reportedly enables Chinese goods, which face steep U.S. tariffs, to be rerouted through these nations before reaching the American market. According to a report titled “The Great Transshipment Scam,” this alleged practice could be facilitating the illegal entry of goods valued at around $60 billion, leading to substantial losses in U.S. tariff revenue.
The report points to several countries and territories as part of this network, including India, Canada, the European Union, and nations such as Israel, Japan, Mexico, South Korea, Taiwan, Brazil, Indonesia, Malaysia, Thailand, Turkey, Vietnam, and Argentina. Other countries mentioned are 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.
In 2025, the report estimates that approximately $67 billion worth of goods bound for the U.S. were allegedly rerouted from China via major transit points including Mexico, India, and Vietnam. This activity is believed to have resulted in an estimated $28 billion in lost U.S. tariff revenue. The report also highlights specific routes, such as the Pune-Gujarat-Chennai corridor in India, where Chinese shipments of products like electric pumps and compressors are claimed to have bolstered local businesses while simultaneously increasing competition for American manufacturers.
As a response to these findings, the U.S. is considering several measures, including more rigorous inspections and interdiction efforts, additional tariffs, and sanctions. There is also the possibility of restricting market access for those countries that are seen as facilitating tariff evasion, as part of a broader strategy to protect U.S. economic interests.