The United States has recently raised concerns about a “shadow transshipment network” involving 38 countries and the European Union, which it claims facilitates the entry of Chinese goods into the American market, bypassing high tariffs. A report titled “The Great Transshipment Scam” suggests that this potentially illicit activity could be valued at approximately $60 billion. The report argues that this network has led to considerable losses in US tariff revenue.
The nations and territories alleged to be part of this network include India, Canada, the European Union, Israel, Japan, Mexico, South Korea, Taiwan, Brazil, Indonesia, Malaysia, Thailand, Turkey, Vietnam, 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 estimates that in 2025, goods worth about $67 billion bound for the US were allegedly rerouted from China through major hubs such as Mexico, India, and Vietnam, potentially resulting in $28 billion in lost US tariff revenue.
Particularly highlighted in the report is the Pune-Gujarat-Chennai corridor in India, where Chinese shipments of items like electric pumps and compressors are said to have benefited local businesses. Meanwhile, this has reportedly intensified competitive pressures on US manufacturers.
In response to these allegations, the US is considering implementing several measures. Proposed actions include heightened inspections and interdiction efforts, the imposition of additional tariffs, sanctions, and even restricting market access for countries found to be aiding in tariff evasion.