Washington has alleged that China is using more than 40 third countries, including India, to re-export goods to the United States in order to evade higher tariffs on Chinese products.
According to a White House report, the practice has expanded after additional duties were imposed in 2018, with some shipments that would have gone directly from China now moving through lower-tariff jurisdictions before entering the US market.
The report, titled “The Great Transshipment Scheme” and prepared by presidential trade adviser Peter Navarro, says the rerouting often involves minimal processing, label changes, invoice adjustments, or altered export documents to make Chinese-origin goods appear as if they were made elsewhere.
It lists India, Canada, the European Union, Israel, Japan, Mexico, South Korea and Taiwan among the economies with significant trade links connected to these flows. For India, it points to industrial hubs such as Chennai, Pune and Ahmedabad, citing supply chains linked to China-associated products including pumps and compressors.
The report warns that if such goods enter the US via India, it could affect manufacturers producing similar items in areas such as Cincinnati, Dayton and Columbus. It also estimates that in 2025, goods worth about Rs 6.43 lakh crore may have reached the US from China via three major transshipment hubs—Mexico, India and Vietnam—and says an AI-based monitoring system called “Detective Border” is being developed with US Customs and Border Protection to detect and curb such activity.
