A report released by the White House on August 14, 2026, raises concerns that foreign exporters are routing goods through third countries to evade U.S. tariffs. The report identifies over 40 countries, including China, Panama, Mexico, and Colombia, as posing a high transshipment risk. Transshipment involves routing goods through an intermediary country before entering the U.S. under a different country of origin, potentially qualifying for lower tariffs.
The 25-page report, titled "The Great Transshipment Scam," was produced by the White House Office of Trade and Manufacturing Policy, led by trade adviser Peter Navarro. It states that China has historically exemplified transshipment practices, particularly after the imposition of Section 301 tariffs in 2018, which led to a decrease in the direct U.S. trade deficit with China.
The report estimates that tariff-avoiding transshipment costs the U.S. Treasury between $19 billion and $26 billion annually. Navarro noted that the Trump administration has taken steps to strengthen enforcement against transshipment. The report also mentions that countries like India could potentially use similar practices to avoid tariffs. U.S. Customs and Border Protection is reportedly using artificial intelligence to detect transshipment activities.
The report comes ahead of a planned visit to Washington by Chinese President Xi Jinping, following President Trump's visit to Beijing in May.