Washington, D.C., August 13 — A new report by the White House Office of Trade and Manufacturing Policy on Thursday accused more than 40 countries of helping Chinese exporters evade U.S. tariffs by routing goods through third-party territories, relabeling them or falsely claiming a non-Chinese country of origin, a practice it called the “Great Transshipment Scam.”
The report categorizes the 40-plus nations into three tiers. India is placed in Tier 1 (“Diversified Scale Leaders”) alongside major economies such as Canada, the European Union, Israel, Japan, Mexico, South Korea and Taiwan. These countries are described as large industrial bases where transshipment risks are embedded within legitimate trade.
Tier 2 (“Significant Economic Integration with China”) includes Brazil, Indonesia, Malaysia, Thailand, Turkey and Vietnam, while Tier 3 (“Small, Opportunistic Targets”) includes Bangladesh, Cambodia, the Philippines, Singapore, Sri Lanka and the United Arab Emirates.
Senior trade adviser Peter Navarro explicitly named India during a briefing, warning that as the U.S. imposes higher tariffs to deter transshipment, countries such as India and Vietnam could attempt to take advantage of lower-tariff routes.
“This is about the 40-plus countries that are enabling the transshipping, and as we impose higher tariffs on other countries, India, Vietnam, down the line, they’re going to try this transshipment too. Our message is simply that the way to pay less is not to cheat; it is to stop dumping, respect intellectual property, drop your barriers to American goods and move toward reciprocity,” Navarro said.
“Our warning to the lower-tariff countries facilitating and enabling the transshipping is this: preferential access to the American market is not a license to launder somebody else’s exports,” he added.
The report cited examples such as Chinese electric motors fitted into recliners in Vietnam and “screwdriver factories” performing minimal assembly to disguise a product’s origin without achieving “substantial transformation.”
The crackdown coincides with complex trade talks between Washington and New Delhi over a reciprocal tariff deal, further complicated by U.S. pressure concerning India’s purchases of Russian oil.
The U.S. Trade Representative’s Office has confirmed that anti-transshipment clauses are now being written into every new deal, with penalties for countries that allow disguised Chinese goods through their ports. Officials said these clauses would be enforced according to their “spirit,” meaning countries could face penalties even without a clear-cut violation.
Officials outlined three measures: an executive order strengthening enforcement powers at U.S. Customs and Border Protection (CBP); a new AI-driven monitoring system dubbed a “detective border” that screens shipments for transshipment risks before they reach U.S. ports; and anti-transshipment clauses written into future trade agreements, including any deal with India.
Under the plan, if a shipment is found to have been transshipped, CBP will be able to retroactively claim tariffs on a company’s shipments over the previous year, not just the consignment in question.
Although briefing officials repeatedly stressed that the report “is not about China” specifically, they named Vietnam, Cambodia, Malaysia, Indonesia and the Philippines as key transshipment hubs and said other high-tariff countries would likely follow suit.
The report comes as India continues separate talks with Washington over a reciprocal tariff deal, complicated further by U.S. pressure over India’s purchases of Russian oil.
Officials declined to say how the findings might factor into U.S. President Donald Trump’s expected meeting with Chinese leader Xi Jinping, saying only that the report would inform the U.S. Trade Representative’s approach at the negotiating table. (ANI)
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