The U.S. government has accused 38 countries and the European Union of being involved in a “shadow transshipment network,” which allegedly allows Chinese goods to bypass high American tariffs by entering the U.S. through other nations. A report titled “The Great Transshipment Scam” estimates that this potentially illicit activity could be valued at approximately $60 billion, resulting in substantial losses in U.S. tariff revenue.
The report names countries and territories such as India, Canada, the European Union, Israel, Japan, Mexico, South Korea, Taiwan, Brazil, and several others, as participants in this network. It claims that about $67 billion worth of goods destined for the U.S. were supposedly rerouted from China via major transit points like Mexico, India, and Vietnam in 2025, leading to an estimated $28 billion in lost tariff revenue for the United States.
One specific area highlighted in the report is the Pune-Gujarat-Chennai corridor in India. The document suggests that Chinese shipments, including products like electric pumps and compressors, have traveled through this corridor, benefiting local businesses while increasing pressure on U.S. manufacturers due to heightened competition.
In response to these findings, the U.S. is considering a range of measures, including stricter inspections, additional tariffs, sanctions, and potentially restricting market access for countries identified as facilitating tariff evasion. These actions aim to curb the practice and recover lost revenue.