More than 40 countries have helped China evade U.S. tariffs by routing exports through nations with lower levies on imports into the U.S., according to a report released on August 13 by the administration of President Donald Trump.
The report, titled “The Great Transshipment Scam,” said the U.S. faces “a growing challenge from the illegal transshipment of goods through third countries to evade applicable tariffs and other trade remedies,” describing the strategy as “fraud cloaked in paperwork.”
Illegal transshipment may involve relabeling, repackaging, re-invoicing, minor processing, false country-of-origin claims or other actions intended to secure tariff treatment that would not apply if the goods’ true economic origin were declared, the report said.
According to BBC News, White House trade adviser Peter Navarro said the practice had cost "American jobs and billions in revenue."
The countries named include some of America’s biggest trading partners — Mexico, Canada, India, Japan and South Korea.
A spokesperson for the Chinese embassy in Washington said: "Trade wars have no winners" and that it opposes the U.S. tariff measures and the use of state power to target China's companies.
"Any unilateral actions or agreements concerning transshipped goods must not target or harm the interests of third parties," the spokesperson added.
According to government and private sector estimates quoted by the White House, $30-$300 billion in goods have been moved from countries with higher tariffs through those with lower rates.
"What has changed in today's Great Transshipment Scam is not merely the speed and scale of this modern form of smuggling, but the breadth, depth, and sophistication of the global Shadow Transshipment Network through which China's tariff evasion now moves," the White House wrote.
