The United States has identified 38 nations and the European Union as participants in a “shadow transshipment network,” which allegedly facilitates the entry of Chinese goods into the U.S. market via third-party countries, circumventing high U.S. tariffs. This accusation is part of a report titled “The Great Transshipment Scam,” which assesses the potential financial impact of this practice at approximately $60 billion, and highlights the substantial loss in U.S. tariff revenue attributed to these activities.
The report lists a wide range of implicated countries and territories, including India, Canada, Japan, Mexico, South Korea, Taiwan, and Brazil, among others. It claims that in 2025, about $67 billion worth of goods destined for the U.S. were rerouted from China through major transshipment hubs such as Mexico, India, and Vietnam. This rerouting allegedly resulted in the U.S. losing approximately $28 billion in tariff revenues.
A particular focus of the report is the Pune-Gujarat-Chennai corridor in India, where it alleges that Chinese products, including electric pumps and compressors, have been transshipped. This activity is said to have supported local businesses in the corridor while simultaneously putting increased competitive pressure on U.S. manufacturers.
In response to these findings, the proposed U.S. measures include heightened inspections and interdictions, the imposition of additional tariffs, sanctions, and potentially restricting market access for countries found to be facilitating tariff evasion. This approach aims to address the economic impact of the alleged transshipment practices and protect U.S. industry interests.