The White House report on the China tariff evasion network, published on 14 August, names more than 40 countries across three tiers of culpability, accusing them of allowing Chinese goods to be routed through their territories to avoid US import duties. Washington says between $30bn (£22bn) and roughly $300bn in goods have moved through lower-tariff jurisdictions in this way, citing government and private-sector estimates.
The 25-page document, titled ‘The Great Transshipment Scam’ and produced by the White House Office of Trade and Manufacturing Policy, describes what it calls a ‘Shadow Transshipment Network’ through which China has, in the administration’s telling, systematically laundered exports to preserve access to the US market.
Inside the China Tariff Evasion Network
The report groups countries into three tiers. Tier 1, labelled ‘Diversified Scale Leaders,’ includes Canada, the European Union, India, Israel, Japan, Mexico, South Korea, and Taiwan. These are jurisdictions, the report says, where ‘illegal transshipment risk is embedded within broad legitimate trade flows.’
Tier 2, described as ‘Scale Leaders with Significant Economic Integration with China,’ covers Brazil, Malaysia, Indonesia, Thailand, Turkey, and Vietnam. The report links their involvement to input sourcing, shared logistics systems, and regional rerouting channels.
Tier 3, according to Fortune, contains what the White House labels ‘small, opportunistic Chinese targets,’ including Singapore, Myanmar, the Philippines, Uzbekistan, Kazakhstan, Argentina, Chile, and Colombia.
The method itself is not new. Transshipping, the practice of routing cargo through a third country en route to its final destination, has long been used in global trade. What the White House claims has changed is the scale and sophistication: goods are repackaged, paperwork is altered, and origins are obscured. The report calls it ‘fraud cloaked in paperwork.’
White House trade adviser Peter Navarro was blunter. The Hill reports him saying: ‘For years, the great transshipment scam has let communist China launder its exports.’ He told reporters separately that the scheme had cost ‘American jobs and billions in revenue.’
To catch it, the administration says it has deployed an AI-powered detection system called ‘Detective Border.’ The enforcement architecture goes further: a Fox Rothschild analysis of the report notes that Trump signed an executive order on 3 June 2026 directing the Department of Homeland Security and the Attorney General to prioritise enforcement involving illegal transshipment, including Enforce and Protect Act investigations, alongside stronger penalties and tighter bonding requirements.
A Bargaining Chip Before the September Summit
My read is that the timing here is as deliberate as the content. Trump met President Xi in Washington in May 2026, with the stated aim of enhancing bilateral economic cooperation, according to Yahoo Finance. A further meeting is expected in September. Releasing a report that accuses more than 40 countries of facilitating the China tariff evasion network, weeks before that summit, is not an accident of scheduling.
Chang Pao Li, associate professor of economics at Singapore Management University, told the BBC that the report could be used to strengthen Washington’s negotiating hand. ‘Washington can argue that China has preserved access to the US market indirectly and that any broader trade settlement must therefore address not only direct Chinese exports but also third-country routing,’ she said. She added that economies with deeper integration in Chinese supply chains ‘may now face additional risk and costs.’
The Chinese embassy in Washington offered the standard riposte: ‘trade wars have no winners,’ and that any agreements concerning transshipped goods ‘must not target or harm the interests of third parties.’
Not everyone is persuaded by the analytical rigour behind the White House’s case. The Straits Times reports that most trade experts characterise the report as ‘less an intellectually rigorous economic analysis than a political document designed to reinforce the administration’s case for tariffs and tougher enforcement.’ The document itself conflates legitimate supply-chain reorganisation, which is legal, with deliberate fraud, which is not. Chang acknowledged as much, noting that shifts in trade patterns ‘may partly reflect legitimate production relocation.’
That ambiguity is, I’d argue, precisely what makes this document useful to the White House. A blurry line between legal restructuring and illegal evasion gives negotiators maximum flexibility to apply pressure on third countries without being pinned to a precise legal standard. The September summit will reveal whether that pressure translates into concessions, or simply hardens the positions on all sides.
