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

The United States government has estimated that the loss of tariff revenue due to transshipped goods from China, potentially costing between US$19 billion and US$26 billion annually, is a significant issue. According to a White House report, around 40 countries pose elevated risks for such illegal transshipments, often involving minimal processing, relabeling, and repackaging of Chinese-origin components. The Chinese embassy in Washington has yet to comment on the matter.

The report, utilizing a range of estimates from private and government sources, suggests that the total value of transshipped goods could be as high as US$303 billion annually. The central estimate of US$75 billion, on which the US$19 billion to US$26 billion in lost import taxes is based, accounts for about 450,000 US jobs lost, either directly or indirectly.

Routing Chinese products through third countries like Mexico or Canada can potentially eliminate duties entirely, according to the report. Despite a decline in direct imports from China, which fell to a 16-year low of US$308.7 billion in 2025, imports from Mexico and Vietnam have surged in recent years, as per US Census Bureau data.

The report also highlights the US Customs and Border Protection agency's deployment of AI tools to better detect suspected transshipments of goods. Machine learning models analyze container markings, packaging patterns, and X-ray imaging to detect discrepancies between declared and actual cargo.