US flags 40 economies, including S’pore, in China’s ‘shadow transshipment network’

Singapore and around 40 other nations may be unwittingly utilized by Chinese exporters as part of a strategy to circumvent US tariffs, according to a report from President Donald Trump's administration. This practice, dubbed "shadow transshipment," aims to mask the genuine origin of goods. To combat this issue, the administration intends to leverage an AI-driven "Detective Border" system.

The report, titled "The Great Transshipment Scam," outlines a three-tier classification of countries involved in this network. Tier 1 countries, including Canada, the European Union, India, Israel, Japan, and Taiwan, serve as significant US-bound export platforms, with transshipment risk embedded in legitimate trade flows. Tier 2 economies, like Brazil, Indonesia, Malaysia, Thailand, Turkey, and Vietnam, have substantial economic ties with China, making them attractive targets for China-linked trade rerouting.

Singapore, however, falls under Tier 3 – a category comprising smaller, more vulnerable economies such as Cambodia, Laos, Myanmar, and the Philippines. These nations present minimal illegal transshipment volumes but possess unique attributes, such as low-cost labor, free zones, port or border access, and limited Customs enforcement capacity, rendering them appealing for China-linked trade manipulation.

The report suggests that as these 40 economies grow increasingly dependent on Chinese inputs, Beijing could gain enhanced commercial and geopolitical leverage while retaining indirect access to the US market. Singapore Customs has affirmed its commitment to adhering to international trade compliance standards and collaborates with foreign partners to identify and address illicit goods transiting through the nation.