The Trump administration has publicly accused more than 40 of America's trading partners of helping China circumvent US tariffs by channelling Chinese goods through third countries where lower duty rates apply. The White House released the report, titled 'The Great Transshipment Scam', on August 13, 2026.
The practice at issue is known as transshipment. Chinese exporters are alleged to send goods to a third country, where they are relabelled, repackaged, reinvoiced, or subjected to minor processing, before being exported onward to the United States under a false or misleading country of origin. The White House describes these practices as 'fraud cloaked in paperwork.'
The report was produced by the White House Office of Trade and Manufacturing Policy. Peter Navarro, the administration's senior trade adviser, led its preparation and has been its principal public advocate. He framed the accusation pointedly: 'This isn't about China… This is about the 40-plus countries that are enabling the transshipping.'
Among the countries named as elevated transshipment risks are Canada, Mexico, the European Union, India, Japan, South Korea, Taiwan, Israel, Brazil, Indonesia, Malaysia, Thailand, Turkey, and Vietnam. The list spans six continents, encompassing close US allies alongside emerging-market partners.
The report divides the named countries into three categories. The first covers large, diversified economies — such as Canada, the EU, and Japan — where transshipment risk exists alongside substantial legitimate trade. The second covers countries significantly integrated with China-linked supply chains, including Brazil, Vietnam, and Malaysia. The third covers countries that enjoy preferential access to the US market, making them, in the report's framing, 'attractive opportunistic targets' for rerouting schemes.
The White House estimates that approximately $75 billion in goods are transshipped illegally into the United States each year, resulting in $19 billion to $26 billion in lost federal tariff revenue annually. The range of estimates for total transshipped goods, drawing on government and private sector analyses, runs from roughly $34.2 billion to $303 billion per year. Goldman Sachs puts the figure at approximately $40 billion a year.
A separate analysis by the Commerce Department found that US-bound goods were transshipped from China through Mexico, India, and Vietnam in 2025, resulting in an estimated $28 billion in lost tariff revenue. Using analysis from Exiger, a supply-chain risk firm, the White House further estimated that illegal transshipment could displace approximately 450,000 US jobs and reduce annual gross domestic product by between $113 billion and $150 billion. The specific methodology behind those figures has not been made public.
The transshipment problem is not new. It became markedly more prevalent after the Trump administration imposed tariffs on hundreds of billions of dollars of Chinese goods in 2018, during the president's first term. The gap between US tariff rates on Chinese goods and rates applied to third countries created a persistent commercial incentive to reroute exports.
The August 13 report does not announce new tariffs. Navarro described it as a source of information for ongoing investigations and said its findings will factor into bilateral trade negotiations. The administration also said it plans to deploy artificial intelligence tools to help detect illegal transshipment in future, though the precise status of those tools — whether deployed or still in development — has not been specified.
The report's release adds pressure to diplomatic relationships already strained by tariff disputes. Separately, as of late July 2026, the Trump administration was also reported to be preparing fresh tariffs on dozens of countries following the expiration of a temporary 10 per cent global duty, according to Reuters, citing the Financial Times. Whether any of the countries named in the transshipment report will face specific penalties as a consequence of its findings remains unclear.
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