US flags dozens of trade partners as risks for aiding tariff evasion

The Trump administration has identified numerous US trading partners as potential risks for aiding Chinese tariff evasion, pledging to utilize artificial intelligence to detect illegal practices in the future. Among the countries named are the European Union, Taiwan, Mexico, Canada, India, Japan, South Korea, and Vietnam. The White House report focuses on the issue of "illegal transshipment," where goods might be sent through a third country with lower US tariffs to avoid higher levies imposed by President Donald Trump.

White House trade advisor Peter Navarro stated that for years, China has been using more than 40 countries to launder its exports. The report highlights that "more than 40 countries" are associated with elevated illegal transshipment risk. Some economies have transshipment risk embedded within broad legitimate trade flows, while others are more integrated with China-linked supply chains.

A third group of countries holds advantages, such as preferential US access, making them attractive targets for rerouting. Navarro also revealed that the White House is collaborating with US Customs and Border Protection on an AI-enabled "detective border" system to assess potential transshipment goods in shipments, which would utilize information like shipment data, routing histories, and other tools.

Experts have long been aware of supply chain diversions from China since Trump's first presidency, when the US and China engaged in a trade war in 2018. Countries like Vietnam have benefited from diversifying their supply chains since the White House returned to office last year. The Trump administration has imposed sweeping tariffs on US trading partners, adding to existing duties that Chinese imports face.