The White House has named more than 40 countries, including Mexico, Canada, and the EU, for allegedly helping Chinese exporters dodge US tariffs through a transshipment network the administration values at $75 billion. The report proposes an AI system to flag suspicious trade flows, and threatens to strain relations with US allies named in it.
The Trump administration has accused more than 40 countries of helping Chinese exporters evade US tariffs, publishing a report titled "The Great Transshipment Scam" through the White House Office of Trade and Manufacturing Policy. The list of accused enablers includes Mexico, Canada, the EU, India, Japan, and South Korea.
Chinese goods get relabeled, rerouted, and stamped with false country-of-origin claims before reaching the US, sidestepping the tariffs Washington has imposed on direct Chinese imports.
The scale of the alleged scheme
The report claims roughly $75 billion in goods were improperly transshipped between February 2025 and February 2026. That figure translates into an estimated $19 billion to $34 billion in lost US tariff revenue over the same period. Trade adviser Peter Navarro spearheaded the report, which argues the named countries have a financial incentive to allow the practice because transshipment generates fees, jobs, and tax revenue.
A Chinese manufacturer facing, for example, a 145% tariff on direct US shipments can instead route goods through a third country. There, the goods receive new paperwork and a different country-of-origin label before continuing to the US at a lower duty rate. The report alleges some goods are minimally processed to qualify for the new classification, while others are simply repackaged.
Washington's answer: an AI border system
Transshipment concerns have shadowed US trade policy for decades, intensifying after the first wave of China tariffs began in 2018. The White House argues that as tariff rates have climbed, the financial incentive to circumvent them has grown as well.
Rather than only publishing findings, the administration outlined plans for an AI-driven "detective border" system meant to flag suspicious import patterns before goods clear customs. The system would analyze shipping data and trade flow anomalies, flagging cases such as a country's exports of a given product suddenly jumping after China faces new tariffs.
Diplomatic and business fallout
Naming allies such as Canada, Japan, South Korea, and EU member states as facilitators of Chinese trade evasion could strain upcoming bilateral talks, given their existing trade relationships with both the US and China. Companies that have restructured supply chains through third countries may also face heightened border scrutiny, and compliance costs are likely to rise as importers work to document legitimate origin claims.
Source: Crypto Briefing
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