White House Targets “Shadow Transshipment Network” to Combat Tariff Evasion
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White House Targets "Shadow Transshipment Network" to Combat Tariff Evasion
- The White House recently released a report alleging that the U.S. loses "tens of billions of dollars" annually due to illegal transshipment, primarily involving Chinese-origin goods.
- Authored by White House trade adviser Peter Navarro, the August 13, 2026 report, titled "The Great Transshipment Scam," identifies over 40 countries as participants in a "global Shadow Transshipment Network."
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The White House has issued a new report, “The Great Transshipment Scam,” which claims that illegal transshipment, largely from China, is costing the United States billions in lost tariff revenue each year. Released on August 13, 2026, the report highlights transshipment as a high priority for U.S. trade policy.
Transshipment involves routing goods through a third country to disguise their true origin and take advantage of lower tariff rates. The White House report alleges that Chinese exporters have systematically diverted goods through more than 40 lower-tariff jurisdictions since the U.S. imposed Section 301 tariffs in 2018. These practices can include minor processing, relabeling, repackaging, re-invoicing, or false country-of-origin claims to create the appearance of a new national origin.
The report estimates annual budgetary losses to the U.S. from illegal transshipping could range from $10 billion to over $100 billion, with some estimates narrowing the range to $19 billion to $26 billion. White House trade adviser Peter Navarro stated that this practice has cost “American jobs and billions in revenue.” Countries identified as significant in this “Shadow Transshipment Network” include Mexico, Canada, India, Japan, South Korea, the European Union, and several Southeast Asian nations such as Vietnam, Malaysia, Thailand, Indonesia, and Cambodia.
While the report frames transshipment as a tariff enforcement gap, some analysts suggest that it may be a political document intended to bolster the administration’s argument for tariffs and stricter enforcement. Experts like Barrett Bingley, Asia regional director at the Asia-Pacific Foundation of Canada, caution against conflating legitimate supply-chain diversification with illegal tariff evasion. The White House has indicated that it is deploying artificial intelligence tools to integrate shipment data as part of strengthened enforcement efforts.