The United States has accused more than 40 countries of assisting China in avoiding American import duties by using them as transit points for goods destined for the US market.
A White House report released Thursday identified Canada, India, Mexico, Japan and South Korea among the nations allegedly involved in the practice, which Washington says has deprived the US of billions of dollars in customs revenue and threatened American employment.
US trade adviser Peter Navarro said the scheme had harmed American workers while reducing government income.
China’s embassy in Washington rejected the allegations, arguing that Beijing opposes the use of tariffs and government authority to pressure Chinese businesses.
Its spokesperson warned that measures targeting goods passing through third countries should not damage other nations’ interests.
The accusations come amid continuing tensions between Washington and Beijing, ahead of a planned September meeting between US President Donald Trump and Chinese President Xi Jinping.
According to estimates cited in the report, between $30 billion and approximately $300 billion worth of merchandise may have been redirected through countries where US duties were comparatively lower.
Known as transshipment, the practice involves sending products through an intermediary country before they reach their final market.
Washington claims Chinese exporters have exploited the system by using foreign destinations as temporary stops and altering packaging or documentation to disguise where products were originally made.
The White House described the alleged operation as a sophisticated international network designed to conceal the true source of merchandise and reduce customs charges.
US authorities said artificial intelligence systems are now being used to identify suspicious shipping patterns and detect potential tariff avoidance.
Economist Chang Pao Li of Singapore Management University said the findings could give Washington additional leverage during upcoming negotiations with Beijing.
She noted that while some changes in international supply routes could be genuine results of companies moving production or restructuring their supply chains, countries closely connected to Chinese manufacturing could face increased financial and regulatory exposure.
Although Washington and Beijing agreed in May 2025 to suspend many of their duties temporarily, disagreements have continued.
Both governments have introduced additional restrictions, including American limits affecting humanoid robot shipments and Chinese controls on certain drone exports.
The dispute follows President Trump’s announcement in April 2025 of sweeping duties on numerous trading partners.
His administration argued that higher import charges would encourage domestic production and protect American employment.
The US Supreme Court later overturned those measures, but President Trump has continued introducing fresh duties through other legal authorities as he pursues his protectionist trade agenda.
The latest White House report is likely to become another contentious issue when the American and Chinese leaders meet, particularly as Washington seeks assurances that Chinese products cannot regain access to the US market indirectly through third countries.
By: Magdalene Agyeiwaa Sarpong