India helping China evade US tariffs? White House weighs anti-transhipment penalties, says it's losing $19B-$26B a year

The White House is considering imposing penalties on countries that help China evade US tariffs by routing their exports through third countries, a practice known as transshipping. The report claims the US is losing $19 billion to $26 billion in annual tax revenue due to this transshipment scam. China, in response to new tariffs in 2018, started sending goods to other nations for packaging and limited assembly, which made it appear as though US imports from China had dropped.

India, along with other major economies such as Canada, the European Union, Israel, Japan, Mexico, South Korea, and Taiwan, is categorized under Tier 1 (Diversified Scale Leaders). Peter Navarro, the White House trade adviser, stated that China is laundering its exports through over 40 countries, and India's Pune–Gujarat–Chennai production belt is affected by the transshipping of pumps and compressors.

The report also mentions the creation of an AI-driven monitoring system called a "detective border" to screen shipments for transhipment risk before they reach US ports.