US accuses India, 40 nations of aiding China's tariff evasion
What's the story
The United States has accused over 40 countries, including India, of being part of a "shadow trans-shipment network" that helps China evade high tariffs. The allegation was made in a White House report titled "The Great Transshipment Scam," championed by top trade adviser Peter Navarro. The report claims that this practice has become more common since 2018, when the Trump administration imposed Section 301 tariffs on China for unfair trade practices.
Trade impact
Navarro says transshipment scam has let China launder exports
The report estimates that the annual value of illegally transshipped goods could be anywhere between $40 billion and $303 billion. The wide range is due to differences in methodology and definitions used in various estimates.
Navarro told reporters, "For years, the great transshipment scam has let Communist China launder its exports through more than 40 countries."
He named India among key trading partners involved in this network.
Hub designation
India designated as Tier-1 diversified scale leader
India has been designated a "Tier-1 Diversified Scale Leader" in the US report, along with the European Union, Canada, Mexico, Japan, and South Korea.
This classification indicates that these economies are major global trade hubs where transshipment risk is high due to large volumes and diversity of goods entering the US.
The report said India, Mexico, and Vietnam were top destinations for transshipped Chinese-origin goods in 2025.
AI intervention
US to use AI system to detect transshipped goods
The report also stated the US plans to deploy an artificial intelligence-enabled system called "Detective Border" to detect suspected transshipped goods before they enter American markets.
The system will analyze shipment data, routing histories, product classifications, and other indicators.
Its objective is to help US Customs and Border Protection distinguish between legitimate trade activities and illegal pass-through trade.