The United States has identified 38 countries and the European Union as part of a “shadow transshipment network,” which allegedly enables Chinese goods, subject to high tariffs, to enter the U.S. market via third-party countries. A report titled “The Great Transshipment Scam” estimates that this potentially illegal activity could be valued at around $60 billion, leading to significant losses in U.S. tariff revenue.
The report highlights that approximately $67 billion worth of goods bound for the U.S. were allegedly rerouted from China through major hubs such as Mexico, India, and Vietnam in 2025, resulting in an estimated $28 billion loss in tariff revenue for the U.S. The named countries and territories involved in this network include prominent global players such as India, Canada, the European Union, Israel, Japan, Mexico, South Korea, Taiwan, and Brazil, among others.
Specific attention is drawn to the Pune-Gujarat-Chennai corridor in India, where Chinese shipments of items like electric pumps and compressors have reportedly benefited local businesses while simultaneously increasing competitive pressure on U.S. manufacturers. This practice has prompted concerns about the impact on American industries and the potential weakening of U.S. trade policies.
In response to these findings, the U.S. is considering several measures to counteract this alleged transshipment. These include implementing stricter inspections and interdiction processes, applying additional tariffs, imposing sanctions, and potentially restricting market access for countries that are seen as facilitating tariff evasion. These proposed actions aim to safeguard U.S. economic interests and ensure the enforcement of its trade tariffs.