White House alleges that companies are systematically routing trade through third-party nations to evade US tariffs
3-MIN READ3-MIN ListenNayan Sethin WashingtonPublished: 6:45pm, 13 Aug 2026The Trump administration on Thursday released a sharply worded report accusing Chinese exporters of orchestrating a system of “illegal transshipment” through more than 40 third countries to dodge US tariffs, branding the practice “The Great Transshipment Scam.”
The 25-page document claims Chinese firms have systematically diverted goods through lower-tariff jurisdictions since the US kicked off its trade war with China in 2018.
It alleges that exporters use limited assembly, relabelling, repackaging, re-invoicing and false country-of-origin declarations to disguise Chinese-origin products and secure more favourable tariff treatment on entry into the US.
The White House report says that Chinese exporters have “increasingly routed goods through third countries … where limited assembly, finishing, repackaging, relabelling or documentation changes could create the appearance of a different national origin.”
The report cited a range of third-party estimates for the annual value of goods involved in illegal or suspect transshipment, spanning roughly US$40 billion to US$303 billion.
01:16US slaps new tariffs ranging from 10-12.5% on 60 economiesAssuming US$75 billion in annual illegal transshipment, the administration estimates that roughly 450,000 American jobs have been displaced and up to US$150 billion of GDP has been lost. These figures are described as model-based illustrations rather than observed counts.
