The United States has leveled accusations against 38 countries and the European Union, alleging their involvement in a “shadow transshipment network.” This network purportedly enables Chinese goods, subject to hefty U.S. tariffs, to enter the American market via third-party countries, circumventing tariff regulations. A report, “The Great Transshipment Scam,” sheds light on the potential scale of these activities, estimating that such illegal transshipment could account for approximately $60 billion. The report suggests this practice has caused significant losses in U.S. tariff revenue.
Nations and territories reportedly participating in this network include India, Canada, the European Union, and several others like Israel, Japan, Mexico, South Korea, Taiwan, Brazil, and Indonesia. Also named are Malaysia, Thailand, Turkey, Vietnam, Argentina, Azerbaijan, Bangladesh, and Cambodia, among others. The report further alleges that $67 billion worth of goods destined for the U.S. were transshipped from China through major hubs such as Mexico, India, and Vietnam in 2025, leading to an estimated $28 billion in lost U.S. tariff revenue.
The report specifically points to the Pune-Gujarat-Chennai corridor in India, claiming it has become a conduit for Chinese shipments of items like electric pumps and compressors. These activities are said to have bolstered local businesses along the corridor while simultaneously increasing competitive pressure on U.S. manufacturers.
In response to these findings, the U.S. is considering a range of measures aimed at curbing such practices. Proposed actions include implementing stricter inspections and interdictions, imposing additional tariffs, and possibly enacting sanctions. Furthermore, the U.S. may also consider restricting market access for countries that are found to facilitate tariff evasion.