The United States has accused more than 40 countries of helping China avoid American tariffs by routing Chinese goods through countries with lower import duties.
A White House report released on Thursday said the practice had allowed billions of dollars in Chinese goods to enter the US market while avoiding higher tariffs.
US Accuses Countries of Facilitating Transshipment
The countries named in the report include Canada, India, Mexico, Japan and South Korea.
White House trade adviser Peter Navarro said the practice had cost the United States “American jobs and billions in revenue”.
The process, known as transshipping, involves moving goods through a third country before they reach their final destination. The US says China has used the system to conceal the true origin of some products and secure lower tariff rates.
The White House described the alleged practice as “fraud cloaked in paperwork” and accused China of taking advantage of countries with lower US import duties.
Estimates cited in the report suggest that between $30bn and about $300bn worth of goods may have been rerouted through third countries.
China Rejects US Claims
China has rejected the US approach to tariffs and warned against targeting companies from third countries.
A spokesperson for the Chinese embassy in Washington said that “trade wars have no winners” and opposed unilateral US measures.
The spokesperson also said agreements concerning transshipped goods should not target or harm the interests of third countries.
The BBC has contacted the governments of Canada, India, Mexico, Japan, South Korea and other countries named in the report for responses.
Report Could Affect Trump-Xi Talks
The report comes ahead of a planned meeting between US President Donald Trump and Chinese President Xi Jinping in Washington in September.
Analysts say the allegations could strengthen Washington’s negotiating position by allowing the US to argue that Chinese goods continue to reach American consumers indirectly despite existing trade restrictions.
Chang Pao Li, an economics professor at Singapore Management University, said the US could use the issue to push for any future trade agreement to address both direct Chinese exports and goods routed through third countries.
She also noted that some changes in global trade routes could reflect legitimate shifts in manufacturing and supply chains, but countries closely integrated with Chinese supply networks could face additional risks and costs.
US Expands Efforts to Track Goods
The White House said the US has deployed artificial intelligence tools to identify suspected transshipment activities.
The latest allegations add to ongoing trade tensions between Washington and Beijing. Despite a pause in most tariffs following talks in May 2025, the two countries have continued imposing sanctions and trade restrictions on each other.
Trump has repeatedly introduced new tariffs using alternative legal measures after his earlier sweeping tariff programme was struck down by the US Supreme Court.
