The White House released a report on August 13, 2026, detailing concerns that foreign exporters are using third countries to route goods and evade U.S. tariffs. The report identifies over 40 countries, including China, Panama, Mexico, and Colombia, as high-risk for transshipment activities. Transshipment involves routing goods through an intermediary country to change their country of origin, potentially qualifying them for lower tariffs.
The 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 after the implementation of Section 301 tariffs on China in 2018, there was a decrease in the direct U.S. trade deficit with China in 2019 and 2020, as Chinese exporters began routing goods through third countries.
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 enhance enforcement against transshipment practices. He also mentioned that countries like India might utilize similar methods to avoid tariffs. The report suggests that the value of goods transshipped to avoid tariffs could range from $34.2 billion to $303 billion annually.
U.S. Customs and Border Protection is reportedly using artificial intelligence in a prototype program to detect transshipment activities. The report was released ahead of a planned visit by Chinese President Xi Jinping to Washington.