# The Bigger Picture

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U.S. Escalates Fight Against China Tariff Evasion, Flags Over 40 Countries as Transshipment Risks Policy Context: Tariffs and the Rise of Transshipment The current U.S. crackdown builds on tariff policy dating to 2018, when Section 301 tariffs were first imposed on Chinese goods. Trade adviser Peter Navarro has described transshipment as driven by tariff arbitrage: when one country's tariff on a product is higher than another's, the gap becomes a profit opportunity, even a business model in its own right. After the 2018 tariffs took effect, the direct U.S. trade deficit with China fell, and Chinese exporters increasingly routed goods through third countries where limited assembly, relabeling, or documentation changes could create the appearance of a different country of origin. That pattern is now the focus of a major new enforcement push. The "40-Plus Countries" Risk Designation On August 13, 2026, the White House Office of Trade and Manufacturing Policy released a report titled "The Great Transshipment Scam," a 25-page document identifying more than 40 countries as posing elevated transshipment risk. Being named on this list is not itself an accusation of wrongdoing — the report acknowledges that these named countries are major U.S. trading partners that also conduct large volumes of legitimate trade. Larger partners such as Canada, the European Union, India, Israel, Japan, Mexico, South Korea and Taiwan were grouped in a top risk tier the report calls "Diversified Scale Leaders," while smaller hubs cited include Costa Rica, the Dominican Republic, Kenya, Morocco, Kazakhstan, Jordan and the United Arab Emirates, and other coverage adds Panama, Colombia, Brazil, Argentina, Chile, Peru and further Latin American countries to the list. Because news coverage of the report does not consistently reproduce one identical, complete roster of all 40-plus jurisdictions, this article does not attempt to list every country by name — readers wanting the full, authoritative list should consult the White House report directly (linked below). Enforcement Tools and Mechanisms A June 3, 2026 executive order, "Strengthening Customs Enforcement," directs the Department of Homeland Security and Customs and Border Protection to prioritize enforcement against forced labor imports, misclassification, undervaluation and illegal transshipment, including investigations under the Enforce and Protect Act for evasion of antidumping and countervailing duty orders. The order also requires CBP to establish a penalty floor of at least 50% of the assessed penalty and to eliminate mitigation for repeat offenders, while tightening bonding and disclosure requirements, especially for foreign importers of record. On the technology side, the administration has outlined an AI-enabled system called "Detective Border" that would integrate shipment data, routing histories, product classifications and ownership relationships to flag suspicious cargo before it clears customs. Separately, the administration says it has built anti-transshipment provisions, including rules-of-origin requirements, into its reciprocal trade agreements to prevent tariff benefits from accruing to goods substantially originating in China. Implications for Trade, Supply Chains and Affected Countries The financial stakes cited are large but disputed even within the report itself: under a central estimate of $75 billion in annual illegal transshipment, the administration projects roughly 450,000 displaced jobs, $113–150 billion in reduced GDP, and $19–26 billion in lost federal tariff revenue, though it labels these figures "model-based illustrations rather than direct observations." A separate Commerce Department analysis focused on Mexico, India and Vietnam alone estimated about $67 billion in transshipped goods and roughly $28 billion in lost revenue in 2025. For named countries, the practical effect is likely to be heightened customs scrutiny, documentation demands and audit activity at U.S. ports of entry. Officials have signaled the transshipment issue will factor into ongoing reciprocal trade negotiations, and the report's release came weeks before a planned visit to Washington by Chinese President Xi Jinping, adding a diplomatic dimension to its timing. Caveats and Open Questions It is worth noting this report is a policy document produced by the same White House office responsible for designing the tariff program it defends, rather than an independently audited government statistic. Its headline dollar figures are themselves a range assembled from several independent estimates that do not agree with one another. Trade analysts have also long noted that policing transshipment is genuinely difficult, since cargo legitimately passes through third-country ports as part of normal global shipping. Given this, and the lack of one consistently reproduced country list across sources, readers should treat specific figures and full country rosters as evolving and verify them against primary government releases.   Sources The White House — "The Great Transshipment Scam" (official report) https://www.whitehouse.gov/releases/2026/08/the-great-transshipment-scam/ The Hill — White House accuses more than 40 countries of helping China avoid US tariffs https://thehill.com/homenews/administration/6029126-china-tariff-evasion-white-house-report/ South China Morning Post — US accuses Chinese exporters of masterminding 'Great Transshipment Scam' https://www.scmp.com/news/us/article/3363925/us-accuses-chinese-exporters-masterminding-great-transshipment-scam Related YouTube Videos 'Great Transshipment Scam': US Names India Among 40 Hubs Of China's Tariff Evasion, Why It Matters? — https://www.youtube.com/watch?v=hFbvb4jYjVw U.S. Accuses India of Helping China Bypass Tariffs: '$60 Billion Transshipment Scandal' — https://www.youtube.com/watch?v=SKNS8sf3U7M Navarro Says Countries Are Helping China Avoid Tariffs — https://www.youtube.com/watch?v=hHVm00jtbZs What is Great Transshipment Scam? US Accuses India Among 40 Nations Of Helping China Avoid US Tariffs — https://www.youtube.com/watch?v=p5Z95NjMXHA