New Delhi 14.08.2026: China tariff evasion has become the latest flashpoint in Washington’s trade fight with Beijing. The White House says more than 40 countries, including India, helped Chinese goods reach the US through lower-tariff routes, potentially involving as much as $300 billion in trade.

US Accuses 40+ Countries of Helping China Dodge Tariffs

The White House has accused more than 40 countries of helping China sidestep US tariffs by routing Chinese exports through markets that face lower American import duties.

The list includes Canada, India, Mexico, Japan and South Korea.

According to a White House report released on Thursday, the practice allowed Chinese goods to enter the US while avoiding some of the higher duties imposed directly on imports from China. Washington claims the arrangement cost the United States tens of billions of dollars in tariff revenue.

Peter Navarro, a White House trade adviser, said the practice had cost “American jobs and billions in revenue”.

That is a serious accusation. It also puts several major US trading partners under scrutiny, not just Beijing.

The White House says the issue is not simply about goods crossing borders. It argues that China has deliberately exploited differences in tariff rates between countries to reduce the duties ultimately paid when products reach American consumers.

The process has a name: transshipping.

What Is Transshipping?

Transshipping involves moving cargo through another country on its way to its final destination.

In legitimate global trade, goods can pass through third countries for logistical or commercial reasons. The White House, however, alleges that China has used the system to conceal the true origin of products and secure lower US tariffs.

The report claims Chinese goods were moved through third countries and, in some cases, repackaged to make their original source harder to identify.

The White House described the practice as “fraud cloaked in paperwork”.

Its language was unusually aggressive.

The report called the alleged system a “Great Transshipment Scam” and accused China of building a global network designed to exploit tariff differences between countries.

Washington says the network has grown in both scale and sophistication.

How Much Trade May Have Been Rerouted?

The numbers cited by the White House vary sharply.

Government and private-sector estimates included in the report suggest that between $30 billion and roughly $300 billion worth of goods may have been moved from countries facing higher US tariffs through countries where duties were lower.

That is an enormous range.

But even the lower estimate points to a major trade issue. The upper estimate would represent a vast flow of goods moving through alternative routes before reaching the American market.

For Washington, the concern is straightforward. If tariffs are designed to make imports from a particular country more expensive, routing those products through another country can weaken the policy before it reaches the checkout counter.

And that is precisely what the White House says happened with Chinese exports.

India, Canada and Other Trade Partners Under Pressure

India’s inclusion in the White House report is significant because it places New Delhi alongside several of America’s largest trading partners.

Canada, Mexico, Japan and South Korea were also named.

The BBC has contacted the US embassies of those countries and other trading partners listed in the report for comment.

The allegations do not mean that every shipment passing through these countries was part of an organised effort to evade US tariffs. The White House’s claim is that China exploited third-country routes to bypass higher duties.

That distinction matters.

Global supply chains are complicated by design. Components can originate in one country, be processed in another and assembled somewhere else before reaching the final market. Determining the true origin of a product can become particularly difficult when goods pass through multiple jurisdictions.

Washington now says it is using artificial intelligence tools to identify suspected transshipment.

AI Enters the Tariff Fight

The White House report says the US has deployed AI tools to detect transshipment efforts.

That adds a new layer to the tariff battle.

Instead of relying solely on paperwork, customs declarations and traditional enforcement methods, US authorities are increasingly turning to technology to identify unusual trade patterns.

The objective is clear: find shipments that appear to have been routed through third countries to avoid higher duties.

The White House argues that the alleged network has become too broad and sophisticated for conventional enforcement alone.

Whether those tools can reliably distinguish legitimate supply-chain activity from tariff evasion will become an important part of the wider dispute.

For businesses operating across Asia, North America and other major trading regions, the stakes are obvious. Country-of-origin rules and customs documentation can no longer be treated as routine paperwork if Washington believes they are being used to disguise the source of goods.

Beijing Pushes Back

China has rejected the broader US approach to the tariff dispute.

A spokesperson for the Chinese embassy in Washington told the BBC that “trade wars have no winners” and said Beijing opposed US tariff measures and the use of state power to target Chinese companies.

The spokesperson also argued that unilateral measures or agreements involving transshipped goods should not target or harm third-party interests.

That response puts Beijing’s position in familiar territory. China objects to the US use of tariffs and related measures, while Washington argues that stronger enforcement is necessary to protect American workers and government revenue.

Neither side appears ready to blink.

The timing makes the dispute even more important.

Trump and Xi Prepare for September Meeting

The report arrives as US-China tensions remain elevated ahead of a planned meeting between President Donald Trump and Chinese President Xi Jinping in Washington in September.

The two sides paused most tariffs after talks in May 2025, but the broader conflict did not disappear.

Instead, sanctions and restrictions have continued.

The US and China have exchanged measures involving areas including humanoid robots and drone exports. Washington and Beijing have also continued to use trade and technology restrictions as leverage.

The transshipment allegations could therefore become another major sticking point when Trump and Xi meet.

For Trump, tariffs remain a signature economic policy. In April 2025, he unveiled sweeping levies on dozens of US trading partners, driven by the long-held argument that tariffs could strengthen American jobs and the economy.

Those sanctions were later struck down by the US Supreme Court.

Trump, however, continued introducing new tariffs through alternative legal mechanisms.

The policy has survived the legal setback. Now Washington is turning its attention not only to the countries directly targeted by tariffs, but also to the routes goods take before entering the United States.

The dispute goes beyond China and the US.

If Washington believes Chinese exporters are systematically using third countries to reduce tariff exposure, pressure could spread across global supply chains.

India is among the countries named in the report, making the issue particularly relevant for Indian exporters, manufacturers and companies involved in international supply chains.

The core question is simple: where was a product actually made, and did it genuinely undergo processing in the country from which it was shipped?

Those questions can carry major financial consequences when tariff rates differ dramatically between countries.

Washington’s message is equally simple. Tariffs only work if the US can enforce them at the border.

That is why transshipment has moved from a customs issue to a strategic trade issue.

The coming Trump-Xi meeting could determine whether the dispute becomes another negotiating chip or a deeper fracture in an already strained trading relationship.

One thing is certain. The tariff battle is no longer just about what crosses the US border.

It is increasingly about the route it takes to get there.

The US has a legitimate enforcement problem if products are deliberately routed through third countries to avoid duties. A tariff that can be bypassed by changing the shipping label is not much of a tariff.

But Washington needs precision, not theatrics.

India, Canada, Mexico, Japan and South Korea are not interchangeable with China, and legitimate global supply chains should not be treated as suspicious merely because goods cross borders more than once. The answer is tighter origin verification, better customs intelligence and smarter technology.

The use of AI to detect suspicious trade patterns could help, provided the system distinguishes genuine transshipment from ordinary international commerce.

For China, the lesson is equally direct. If exporters rely on third-country routes to escape duties, they should expect those routes to receive greater scrutiny.

The next step should be enforcement based on evidence, not blanket suspicion. Trade rules work when they’re clear, consistently applied and difficult to game. Anything less simply creates another loophole for the next dispute.

@shivendraedits [BTW, taking away my tools won’t suppress my voice.]