(2nd LD) U.S. flags S. Korea, Japan, EU, others over transshipment risks involving China-linked goods

The U.S. administration, under President Donald Trump, has identified South Korea, Japan, Taiwan, and the European Union as among several economies facing transshipment risks involving China-linked products, according to a report released Thursday by the White House Office of Trade and Manufacturing Policy. The report, titled "The Great Transshipment Scam," highlights the use of third countries by Chinese exporters to reroute goods, employing methods such as relabeling, repackaging, and false country-of-origin claims.

The report categorizes 40 countries associated with elevated transshipment risks into three tiers based on factors like scale of China-linked trade, economic integration, and susceptibility to rerouting. South Korea, Japan, Taiwan, the EU, India, Canada, Mexico, and Israel are classified as Tier 1 or diversified scale leaders, while Brazil, Indonesia, Malaysia, Thailand, Turkey, and Vietnam fall under Tier 2 or scale leaders with significant economic integration.

Tier 3 includes smaller economies with lower transshipment volumes but weak-link advantages, such as Switzerland, Singapore, the Philippines, the United Arab Emirates, Chile, and Colombia. The report emphasizes South Korea's semiconductor belt in Gyeonggi Province as a potential conduit for integrated circuits, which could pressure production in other U.S.-bound locations.

U.S. Trade Representative Jamie Greer stated that transshipment undermines American businesses, workers, and the benefits of trade deals, while a senior administration official clarified that the report is separate from Section 301 trade investigations that could lead to new tariffs.