The United States has recently flagged a complex network of 38 countries and the European Union, accusing them of facilitating a “shadow transshipment network.” This network is alleged to enable Chinese products, which are subject to steep U.S. tariffs, to enter the American market through intermediary nations. Such a strategy, according to U.S. authorities, undermines tariff regulations and poses a substantial challenge to American trade policies.
A detailed report, titled “The Great Transshipment Scam,” has surfaced, estimating that this potentially unlawful transshipment might be valued at approximately $60 billion. The document asserts that the practice has led to significant losses in U.S. tariff revenue. Among the nations and regions implicated are India, Canada, the European Union, Israel, Japan, Mexico, and South Korea. Other countries listed include Taiwan, Brazil, Indonesia, and Malaysia, extending to Turkey, Vietnam, Argentina, and even smaller nations like Laos and Oman.
The analysis further notes that in 2025, an estimated $67 billion worth of goods destined for the U.S. were allegedly rerouted from China through key transit hubs such as Mexico, India, and Vietnam. This redirection is believed to have resulted in around $28 billion in lost tariff income for the United States. The report specifically mentions the Pune-Gujarat-Chennai corridor in India, where Chinese shipments, including electric pumps and compressors, have reportedly boosted local businesses while exacerbating competition for U.S. manufacturers.
In response to these findings, the U.S. has proposed a series of countermeasures aimed at tightening control over this issue. These actions include implementing more rigorous inspections and interdiction efforts, imposing additional tariffs, and considering sanctions. Moreover, the U.S. is contemplating restricting market access for those countries that are found to be aiding in the circumvention of U.S. tariffs.