The United States has raised allegations against a group of 38 countries and the European Union, accusing them of being part of a “shadow transshipment network.” This network is said to facilitate the entry of Chinese goods, which are subject to high U.S. tariffs, into the American market by routing them through intermediary countries. A report titled “The Great Transshipment Scam” has put forward an estimate suggesting that this potentially illicit activity could be valued at approximately $60 billion, leading to significant U.S. tariff revenue losses.
The report identifies several countries and territories as part of this network, including nations such as India, Canada, Japan, Mexico, South Korea, and Vietnam, among others. It claims that in 2025, about $67 billion worth of goods destined for the U.S. were allegedly rerouted from China through major hubs like Mexico, India, and Vietnam. This rerouting is believed to have cost the U.S. around $28 billion in lost tariff revenues, the report states.
Particularly highlighted in the report is the Pune-Gujarat-Chennai corridor in India, which is alleged to have seen a surge in Chinese shipments of products like electric pumps and compressors. This influx is said to have given a boost to local businesses along the corridor, while simultaneously increasing the competitive pressure faced by U.S. manufacturers.
In response to these findings, the proposed U.S. actions include implementing stricter inspections and interdiction measures, imposing additional tariffs, and considering sanctions. The U.S. may also contemplate restricting market access for those countries that are found to be facilitating tariff evasion, as part of its strategy to counter this alleged transshipment network.