US flags China transshipment tariff evasion

On August 13, 2026, the United States — White House released a report titled 'The Great Transshipment Scam', accusing more than 40 countries, including India, Mexico, Canada, Japan, South Korea, and Singapore, of participating in a 'shadow transshipment network' that helps China evade U.S. tariffs. The report, authored by trade adviser Peter Navarro, estimates that illegal transshipment costs the U.S. $19 billion to $26 billion in annual tariff revenue, with the annual value of transshipped goods ranging from $40 billion to $303 billion, and a central estimate of $75 billion. The report classifies countries into tiers based on transshipment risk, with India placed in Tier 1 as a 'Diversified Scale Leader'. The U.S. announced plans to deploy an AI-based system called 'Detective Border' to detect and penalize transshipment, with potential retroactive tariffs on falsely declared goods. The report comes ahead of a planned meeting between President Donald Trump and Chinese leader Xi Jinping in September, and amid ongoing trade tensions. China's embassy in Washington responded that 'trade wars have no winners' and opposed the U.S. measures. Singapore — Singapore Customs reaffirmed its compliance with international trade rules, stating that transshipment does not change a product's origin. The report does not impose immediate penalties on the named countries but could affect ongoing trade negotiations, particularly between the U.S. and India.