A new White House report is blowing the lid off what it bluntly calls “The Great Transshipment Scam” — a sprawling tariff-dodging scheme that drains as much as $26 billion a year from the U.S. Treasury while communist China launders its exports through more than 40 countries.
According to Fox News, the 25-page report released Thursday was produced by the White House Office of Trade and Manufacturing Policy, led by trade adviser Peter Navarro. Alongside China, it names Panama, Mexico and Colombia among more than 40 countries posing a high transshipment risk — together with Brazil, Argentina, Chile, Peru, Costa Rica and the Dominican Republic.
The trick is as simple as it is lucrative. Goods get routed through an intermediary country before they enter the United States under a different country of origin — magically qualifying for lower tariffs. American workers and taxpayers pick up the tab.
China wrote the playbook. After Section 301 tariffs hit Beijing in 2018, the direct U.S. trade deficit with China fell in 2019 and 2020. But the goods didn’t stop coming — they just changed costumes. “After their imposition, Chinese exporters increasingly routed goods through third countries,” the report says, describing shipments where limited assembly, repackaging, relabeling or paperwork changes created the appearance of a different national origin.
“Over time, these practices contributed to the development of a global network of production hubs, logistics platforms, free-trade zones, bonded warehouses, processing corridors, and re-export centers,” the report states.
“For years, the great transshipment scam has let communist China launder its exports,” Navarro said, according to The Associated Press. And the money at stake is staggering: the report estimates the scheme costs the Treasury between $19 billion and $26 billion in lost revenue every single year, with government and private-sector estimates putting the value of goods transshipped to avoid tariffs anywhere from $34.2 billion to $303 billion annually.
The administration isn’t just naming names — it’s hunting. U.S. Customs and Border Protection has begun using artificial intelligence in a prototype program to detect transshipment, and importers caught falsifying a product’s origin can face tariffs applied retroactively for roughly a year. Navarro also warned that countries such as India could use transshipment to skirt tariffs, and said the new trade frameworks the administration is pursuing will include provisions to penalize trading partners that engage in the practice.
The timing is no accident, either: the report lands just ahead of Chinese President Xi Jinping’s planned September visit to Washington, following President Trump’s trip to Beijing in May. So much for the tired media narrative that tariffs “don’t work” — the real story is that America’s trading “partners” spent years cheating the system while Washington looked the other way. Now the bill is coming due.
Source: foxnews.com
