The United States has identified 38 nations along with the European Union as part of what it describes as a “shadow transshipment network.” This network is purportedly facilitating Chinese goods, which are subject to steep US tariffs, to penetrate the American market via third-party countries. A detailed report, entitled “The Great Transshipment Scam,” estimates that this potentially illicit activity could involve transactions worth around $60 billion, causing a significant dent in US tariff revenue.
Among the countries and territories flagged in the report are India, Canada, the European Union, Israel, Japan, Mexico, South Korea, Taiwan, Brazil, Indonesia, Malaysia, Thailand, Turkey, and Vietnam. The list extends to 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. The report claims that hubs in nations such as Mexico, India, and Vietnam were instrumental in rerouting approximately $67 billion worth of goods in 2025, originating from China and headed to the US.
This alleged practice has reportedly resulted in an estimated loss of $28 billion in US tariff revenue. The report specifically points to the Pune-Gujarat-Chennai corridor in India, highlighting that Chinese shipments of items like electric pumps and compressors have not only benefited local businesses but also heightened the competitive pressure faced by US manufacturers.
The US is considering a range of responses to tackle this issue, which may include intensified inspections and interdictions, the imposition of additional tariffs, and even sanctions. Furthermore, there is a possibility of restricting market access for those countries found to be facilitating tariff evasion, as part of a broader strategy to safeguard American economic interests.