India, Israel and more: Full list of countries US named in ‘shadow transhipment network’ helping China evade tariffs
India Israel and More: Countries in US Shadow Transhipment Network
Bharatmorningnews.com – A comprehensive new report has identified nearly forty nations participating in what Washington calls a “shadow transhipment network” that helps Chinese exporters evade American tariffs. This intricate system allows Chinese goods subject to steep duties to reach US consumers through intermediary states that offer reduced tariff rates, effectively creating a backdoor for Chinese merchandise into the American market.
The Great Transhipment Scam: Key Findings
According to the document titled “The Great Transhipment Scam,” authored by Peter Navarro, a senior adviser to President Donald Trump, the scope of questionable transhipment activities reaches approximately $60 billion annually. Such practices have deprived the American treasury of tens of billions in expected tariff income, representing a significant loss to US revenue streams.
Navarro’s analysis urges decisive measures against nations facilitating this rerouting of dutiable products. Suggested responses encompass immediate seizure of goods, imposition of penalty tariffs, sanctions, and potentially restricting market access for offending countries. The report emphasizes that coordinated action is essential to prevent further erosion of American trade protections.
“Approximately $67 billion in US-bound goods were transshipped from China through the top hubs—Mexico, India, and Vietnam—in 2025, producing an estimated $28 billion in lost tariff Revenue.”
Based on a central scenario involving $75 billion in yearly illicit transhipment, the report projects that roughly 450,000 positions were displaced domestically. Annual gross domestic product suffered a contraction ranging from $113 billion to $150 billion, while federal revenue shortfalls accumulated between $19 billion and $26 billion. These projections represent model-based calculations rather than directly observed employment figures.
Regional Winners and Losers in the Trade War
The document highlights how permitting Chinese products into the US market at diminished tariff levels has economically advantaged particular Indian corridors while disadvantaging American competitors. Specifically, the Pune-Gujarat-Chennai route has capitalized on Chinese transhipment of electric pumps and compressors, creating new opportunities for local manufacturers.
Meanwhile, manufacturers in Ohio cities including Cincinnati, Dayton, and Columbus have experienced negative consequences from this trade pattern. The report emphasizes that these economic shifts demonstrate how tariff avoidance mechanisms create distinct regional beneficiaries and casualties within both nations, fundamentally altering competitive dynamics.
Proposed countermeasures aim to strengthen enforcement against countries enabling this transhipment network, ensuring that tariffed goods cannot easily circumvent American trade laws through third-party routing. India Israel and more nations must now face potential consequences for their role in this global trade evasion scheme.
What This Means for Global Trade
The identification of these countries in the shadow transhipment network marks a significant development in US-China trade relations. As Washington considers various responses, the affected nations must evaluate whether to adjust their trade policies or face potential penalties. The outcome could reshape international commerce patterns for years to come.
Frequently Asked Questions
Which countries are included in the shadow transhipment network? The network includes nearly forty nations, with India, Israel, Mexico, and Vietnam identified as the top transhipment hubs. Other countries participate to varying degrees in helping Chinese goods evade American tariffs.
How much tariff revenue is being lost through transhipment? According to the report, approximately $28 billion in tariff revenue was lost in 2025 alone, with projections suggesting annual losses could reach between $19 billion and $26 billion under central scenarios.
What actions might the US take against these countries? Potential responses include immediate seizure of goods, imposition of penalty tariffs, sanctions, and restricting market access for offending countries that facilitate the transhipment of Chinese merchandise.
How does transhipment affect American manufacturing? The practice has displaced roughly 450,000 domestic positions and caused GDP contractions ranging from $113 billion to $150 billion annually, while benefiting certain regional corridors like Pune-Gujarat-Chennai in India.