China is dodging export tariffs, Trump White House says

Key Points:

• The Trump White House report reveals countries, especially China, are routing exports through third countries like Mexico and Malaysia to evade U.S. tariffs, causing an estimated annual tax revenue loss of $19 billion to $26 billion.
• China’s transshipping practice, involving over 40 countries, has allowed it to maintain manufacturing growth despite tariffs, posing challenges to U.S. factories and employment, according to White House trade adviser Peter Navarro.
• The report highlights that other nations, including India, may also engage in transshipping, and the Trump administration plans to implement trade frameworks with penalties for such practices.
• The administration estimates $34.2 billion to $303 billion worth of goods are transshipped annually to avoid tariffs, using a central estimate of $75 billion to calculate revenue losses.
• To combat transshipping, U.S. Customs and Border Protection is deploying artificial intelligence to detect false origin claims, allowing retroactive tariffs on imports found to have violated rules within approximately the past year.