Washington — The White House on August 13, 2026, released a 25-page report titled The Great Transshipment Scam: Rise, Scope, and Costs, alleging that Chinese exporters are routing goods through more than 40 countries — including India — to bypass higher US tariffs, according to Business Today. Prepared by the White House Office of Trade and Manufacturing Policy under Peter Navarro, the report argues that the Section 301 tariffs introduced against China in 2018 reduced direct Chinese exports to the United States but also gave rise to a worldwide transshipment network.
According to the report, Chinese products are being relabelled, repackaged, re-invoiced or subjected to limited processing in countries facing lower US tariff rates before being exported to the United States under a different country of origin. The report describes this system as the "Shadow Transshipment Network."
Transshipment exposure estimates
To illustrate the scale of the issue, the report cites five separate estimates of annual transshipment or related exposure:
| Source | Estimate |
|---|---|
| Goldman Sachs | $40 billion |
| White House Council of Economic Advisers | $60 billion |
| Exiger | $75 billion |
| US Commerce Department | $109 billion |
| Altana | $303 billion |
The report notes that these estimates are based on different methodologies and therefore cannot be directly compared.
Three-tier country classification
The report classifies more than 40 countries into three separate tiers based on their alleged role in transshipment activities:
| Tier | Label | Countries/Economies |
|---|---|---|
| Tier 1 | Diversified Scale Leaders | India, Canada, European Union, Israel, Japan, Mexico, South Korea, Taiwan |
| Tier 2 | Significant Economic Integration with China | Brazil, Indonesia, Malaysia, Thailand, Turkey, Vietnam |
| Tier 3 | Small, Opportunistic Targets | Bangladesh, Cambodia, Philippines, Singapore, Sri Lanka, UAE |
According to the report, Tier 1 economies possess large industrial manufacturing bases where alleged transshipment risks are intertwined with legitimate trade flows.
Navarro's warning on tariff evasion
During a media briefing, senior White House trade adviser Peter Navarro specifically referred to India while cautioning that countries could attempt to circumvent higher US tariffs through transshipment as Washington expands its tariff measures.
"This is about the 40-plus countries that are enabling the transshipping, and as we impose higher tariffs on other countries, India, Vietnam, down the line, they're going to try this transhipment too. Our message is simply that the way to pay less is not to cheat; it is to stop dumping, respect intellectual property, drop your barriers to American goods and move towards reciprocity. Our warning to the lower tariff countries facilitating and enabling the transshipping is this: preferential access to the American market is not a license to launder somebody else's exports," said Navarro.
India-specific findings
Business Today reported the report refers to a US Commerce Department estimate that goods worth $67 billion were transshipped through India, Mexico and Vietnam in 2025, resulting in tariff losses of $28 billion. However, it does not specify India's share of that estimate, identify any Indian exporter or provide details of a single fraudulent shipment.
According to the Global Trade Research Initiative (GTRI), the report also singles out India's Pune-Gujarat-Chennai manufacturing corridor for products classified under HS codes 8413-8414, covering pumps and compressors. An analysis by GTRI indicates that India has significant domestic manufacturing capability in these product categories.
During FY2026, India's trade in the flagged product categories included:
- Liquid pumps: exports worth $1.61 billion worldwide, including $414.5 million to the United States; imports from China of $326.4 million.
- Air pumps and gas compressors: exports worth $1.48 billion globally, of which $335.4 million went to the United States.
Business Today reported that the report classifies more than 40 countries into three tiers, warns lower-tariff countries not to "launder somebody else's exports," and cites five non-comparable estimates of the shadow network's annual scale. The report does not, however, specify India's share of the $67 billion transshipment estimate, identify any Indian exporter or provide details of a single fraudulent shipment.
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