A White House report released Thursday alleges that more than 40 countries have facilitated China's evasion of U.S. tariffs by rerouting exports through nations with lower import duties. The report claims this practice, known as transshipping, has allowed China to sidestep tens of billions of dollars in American levies.
Countries identified in the report as having aided China include Canada, India, Mexico, Japan, and South Korea. White House trade adviser Peter Navarro stated that the evasion has resulted in lost "American jobs and billions in revenue."
The White House described the process as a "Great Transshipment Scam," a "modern form of smuggling" characterized by its speed, scale, and sophistication. According to the report, China has utilized third countries as transit points and repackaged goods to conceal their origin, thereby benefiting from lower tariff rates. The U.S. has employed artificial intelligence tools to detect these transshipment efforts.
Estimates cited by the White House suggest that goods valued between $30 billion and $300 billion have been moved from countries with higher tariffs to those with lower rates. The practice of transshipping involves transferring cargo through an intermediate country en route to its final destination.
The report emerges ahead of an anticipated meeting between President Donald Trump and Chinese leader Xi Jinping in Washington D.C. in September. This development is expected to add to existing trade tensions between the two nations.
While a pause on most tariffs was announced following talks in May 2025, both Washington and Beijing have continued to implement sanctions. Recent measures include restrictions on humanoid robot exports to the U.S. and tighter Chinese controls on drone shipments. President Trump initially introduced broad tariffs on numerous trading partners in April 2025, based on the belief that such measures would stimulate American jobs and the economy. Although some of these sanctions were later struck down by the U.S. Supreme Court, Trump has continued to pursue his tariff policy through alternative legal avenues.
A spokesperson for the Chinese embassy in Washington responded to inquiries by stating that "trade wars have no winners" and that China opposes the U.S. tariff measures and the use of state power against its companies. The spokesperson also noted that "any unilateral actions or agreements concerning transshipped goods must not target or harm the interests of third parties."