The Trump administration has identified more than 40 economies as potential transshipment risks and plans to use artificial intelligence to detect goods allegedly rerouted through third countries to avoid US tariffs.
The Trump administration has identified more than 40 countries, including India, the European Union, Canada, Japan and South Korea, as potential risks for helping Chinese goods circumvent US tariffs through third-country trade routes.
A White House report released on Thursday focused on what Washington describes as “illegal transshipment” — a practice in which Chinese goods are routed through another country with lower US tariffs before entering the American market, allowing exporters to avoid higher duties imposed on China.
US trade adviser Peter Navarro accused China of using third countries to disguise the origin of its exports.
“For years, the great transhipment scam has let Communist China launder its exports through more than 40 countries,” White House trade advisor Peter Navarro told reporters. The US report released Thursday pointed to “more than 40 countries associated with elevated illegal transhipment risk.”
The report identified more than 40 economies as having an elevated risk of involvement in illegal transshipment. Alongside India, the European Union and US neighbours Mexico and Canada, the list includes Taiwan, Japan, South Korea and Vietnam.
US plans AI-powered transshipment checks
The administration said the risks differ across economies. In some cases, transshipment concerns are mixed into otherwise legitimate trade flows. Other countries have become deeply connected to supply chains linked to China, while economies offering preferential access to the US market could become attractive locations for companies seeking to reroute Chinese goods.
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Navarro said the White House is working with US Customs and Border Protection on an AI-enabled system designed to identify potentially rerouted shipments.
The proposed technology would analyse information including shipping records, cargo routes and historical routing patterns to determine whether goods entering the US may have been transshipped.
The initiative reflects Washington’s broader effort to prevent companies from bypassing Trump’s tariffs by shifting production or routing goods through other countries.
Supply chains shifted after first Trump trade war
Economists have noted that companies began diversifying supply chains away from China during Trump’s first presidency, when Washington and Beijing engaged in a major tariff confrontation beginning around 2018.
Countries including Vietnam emerged as beneficiaries as businesses sought alternative manufacturing and sourcing locations.
The Trump administration’s latest action comes after the president returned to the White House and imposed sweeping tariffs on US trading partners, while maintaining additional duties on Chinese imports.
The new focus on transshipment could put further scrutiny on countries that have become increasingly important links in global supply chains as businesses reduce their dependence on China.
With inputs from agencies