US flags 40 economies, including Singapore, in China’s ‘shadow transhipment network’

A White House report has identified 40 economies, including Singapore, as potential targets for Chinese exporters seeking to avoid US tariffs through a "shadow transshipment network." The report, titled "The Great Transshipment Scam," alleges that Chinese goods are routed through intermediate, lower-tariffed countries to conceal their true origin. The administration plans to use an AI-powered "Detective Border" system to combat illegal transshipments.

The report estimates that evading tariffs through these transshipments may have cost the US Customs revenue between $40 billion and $303 billion. The identified economies are categorized into three tiers based on their level of involvement in the transshipment network. Tier 1 economies, such as Canada, the EU, India, Japan, and Taiwan, are major US-bound export platforms with embedded transshipment risks.

Tier 2 economies, including Brazil, Indonesia, Malaysia, Thailand, Turkey, and Vietnam, have significant economic integration with China. Tier 3 economies, like Singapore, Cambodia, Laos, Myanmar, and the Philippines, are smaller nations with lower illegal transshipment volumes but attractive advantages that make them vulnerable targets for China-linked rerouting.

The White House warns that as these economies become increasingly reliant on Chinese inputs, Beijing may gain additional commercial and geopolitical leverage while maintaining indirect access to the US market. Singapore, in response to the report, maintains that its transshipment practices comply with international best practices and regulations.