White House says transshipped goods cost $19 billion to $26 billion in lost tariffs

The White House has reported that the United States is losing between $19 billion and $26 billion annually in tariff revenue due to goods being transshipped through third countries to evade U.S. import duties, primarily from China. White House trade and manufacturing adviser Peter Navarro identified around 40 countries with a high risk of being sources of such illegal transshipments, often involving minimal processing, relabeling, and repackaging of Chinese-origin components.

China's embassy in Washington expressed opposition to any party seeking to benefit at China's expense or disrupt industrial supply chains, vowing to take necessary measures to protect its legitimate rights and interests if such situations arise.

Navarro's report utilized estimates from both private sector and government sources to estimate the scale of the problem, ranging from $34 billion to a central case of $75 billion in transshipped goods per year. The lost import taxes, based on the central estimate, are valued at $19 billion to $26 billion annually. The report suggests that routing Chinese products through Mexico or Canada could potentially eliminate duties entirely.

The central case estimate of $75 billion in transshipped goods corresponds to an estimated loss of 450,000 U.S. jobs, both direct and indirect, according to the report. Imports from China reached a 16-year low of $308.7 billion in 2025. However, imports from Mexico and Vietnam have increased sharply in recent years, as per U.S. Census Bureau data.

To better detect suspected transshipment of goods, the U.S. Customs and Border Protection agency is now employing AI tools. These models analyze container markings, packaging patterns, and X-ray imaging to identify discrepancies between declared and actual cargo.