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The White House released a report on Oct. 13 detailing how China allegedly bypassed tariffs imposed by U.S. According to the White House report titled “The Great Transshipment Scam,” the practice created a “global shadow transshipment network” that cost the United States billions of dollars annually in lost customs collections.
Trade advisor Peter Navarro stated that the practice drained American jobs and billions of dollars in tax revenue. The White House report identified several nations involved in facilitating the transshipment network, including Canada, Mexico, Israel, India, Japan, and South Korea.
Global Reactions and Diplomatic Context
In response to the report, a spokesperson for the Chinese Embassy in Washington told multiple media outlets that “there are no winners in a trade war” and expressed opposition to U.S. tariff measures and the use of state power to target Chinese companies. The spokesperson added that any unilateral actions or agreements regarding transshipment goods must not target or harm the interests of third parties.
The White House report characterized China’s routing methods as “fraud disguised in paperwork.” The release precedes a planned meeting in Washington between President Trump and Chinese President Xi Jinping. While the U.S. and China suspended many tariff measures following negotiations in May 2025, both nations have maintained ongoing trade restrictions, including U.S. limits on humanoid robots and strengthened Chinese export controls on drones.
U.S. Enforcement and Artificial Intelligence Tracking
To combat tariff evasion through transshipment, the Trump administration announced that the U.S. is deploying artificial intelligence tools. Specifically, U.S. Customs and Border Protection (CBP) is developing an AI system named “Detective Border.”
According to the administration, the system analyzes transport routes, product details, and ownership data to help border authorities distinguish legitimate trade from attempts to evade tariffs. President Trump initially enacted broad tariffs on dozens of trading partners in April 2025 to boost domestic employment and stimulate the economy.
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