 White House claims over 40 US trading partners are helping China evade tariffs by acting as middlemen |
Source |
American Shipper |
Post Date |
08/19/2026 |
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The White House released a new report Thursday that claims Chinese goods are being passed through middleman countries and labels nearly every top US trading partner a "transshipment risk."
The move reads as a warning of sorts, as President Trump promises more tariff rollouts in the months ahead.
"This isnt about China ?This is about the 40-plus countries that are enabling the transshipping," Peter Navarro, Trumps senior counselor for trade and manufacturing, said on a call with reporters. He predicted the issue "is going to be part of the reciprocal trade negotiations."
The report from the White House Office of Trade and Manufacturing Policy, titled "The Great Transshipment Scam," s with an illustration of a Trojan horse made up of shipping containers.
The named countries span the globe, from Mexico to Europe to Israel to Brazil to Chinas immediate neighbors, and are part of what the report calls a "global Shadow Transshipment Network through which Chinas tariff evasion now moves."
The report groups the countries into three categories: major trading partners with diversified industrial bases, nations the report claims are "closely integrated into China-linked production and supply networks," and a broader category of smaller countries that simply "offer specific advantages" that China could exploit in the future.
Transshipping is traditionally defined as when cargo makes a pit stop in a third country, but Trumps team wants to police it much more narrowly. The report says transshipping affects between $40 billion and $75 billion in imported goods annually, which translates into tens of billions in lost tariff revenues.
Recomming a Detective Border and harsh penalties
China has long been accused by trade experts across the political spectrum of using transshipping to skirt trade barriers, but the White Houses new, more aggressive approach could be felt around the globe if the Trump administration follows through.
The report describes plans for US Customs and Border Protection to police imports, including "an AI-enabled Detective Border" to assist agents.
Comments from Navarro and other officials on Thursday made it clear that this issue could be front and center in future trade talks and could carry harsh penalties.
"Transshipment is a form of free earning off of President Trumps deals and is perpetuated by bad faith exporters who are often the very reason we have tariffs in the first place," US Trade Representative Jamieson Greer said in a statement.
Greers office could soon recomm new unilateral tariffs following an investigation into excess structural capacity on goods from China, the EU, and 16 other trading partners. Navarro described that report as separate but hoped that this weeks report would be a "source of information" for that investigation.
The report could also be a new wrinkle in US-China relations, with Trump scheduled to meet with Chinese President Xi Jinping in a visit to the US next month.
China has already reacted harshly to Trumps focus on transshipping. The Commerce Ministry warned last year that "China will not accept it and will take resolute countermeasures" if it feels that any deal cuts them out of supply chains.
The overall US tariff rate currently stands at 11% across the entire economy, according to the Yale Budget Lab, after so-called Section 122 tariffs expired in July and were replaced with new tariffs levied under a different authority.
Tightening the definition of transshipping
This weeks report highlights an issue Trump has focused on since his return to office, with trade deals announced last year imposing higher rates on what the US deemed transshipped goods. Even then, trade experts warned that this is a difficult area to police.
Cargo being moved from one boat to another at a foreign port en route to its final destination is considered transshipping, with the commonly agreed-upon rules being that the "origin" (and tariff rate) remains with the initiating country.
It becomes the product of the middle country only with "substantial transformation." Trumps team wants to define transshipping more narrowly around what makes a good "transformed" in a way that experts have warned could rewrite global shipping rules.
During the call, Navarro used the example of a recliner constructed in Vietnam that includes a motor made in China, calling it a key example of the type of transshipment they want to stop.
That example, he said, is "the latest form of one of the oldest tricks in the book and that is smuggling."
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