U.S. Administration Accuses Over 40 Countries of Helping China Evade Tariffs

The Trump administration released a report on Thursday titled "The Great Transshipment Scam," which accuses Chinese exporters of routing goods through more than 40 third countries to evade U.S. tariffs. The White House Office of Trade and Manufacturing Policy alleges that Chinese firms use methods such as relabeling, repackaging, and false country of origin claims to disguise the origin of products. To combat this, the administration plans to develop a "detective border" using artificial intelligence to integrate shipment data and routing histories to identify high risk shipments.

The report categorizes the involved economies into three tiers. Tier 1, described as "diversified scale leaders," includes South Korea, Japan, Taiwan, the European Union, India, Canada, Mexico, and Israel. Tier 2, consisting of "scale leaders with significant economic integration," includes Brazil, Indonesia, Malaysia, Thailand, Turkey, and Vietnam. Tier 3, labeled as "small, opportunistic Chinese targets," includes Switzerland, Singapore, the Philippines, the United Arab Emirates, Chile, and Colombia. Specifically, the report notes that South Korea's semiconductor belt in Gyeonggi Province could serve as a conduit for integrated circuits, which puts pressure on U.S. semiconductor production in cities like Phoenix and Austin.

Estimates for the annual value of goods involved in this activity range from 40 billion to 303 billion U.S. dollars. The administration suggests that if 75 billion dollars in annual illegal transshipment occurs, it could result in the loss of 150 billion dollars in GDP and the displacement of 450,000 American jobs. U.S. Trade Representative Jamieson Greer stated that these practices undermine American businesses and workers. A senior administration official clarified that this report is separate from trade investigations under Section 301 of the 1974 Trade Act.