White House Targets Transshipment Loopholes Against China

The White House has published a comprehensive report titled "The Great Transshipment Scam: How Rogue Nations and Global Arbitrageurs Evade U.S. Tariffs," jointly authored by the National Security Council, the Department of Commerce, and the Department of Homeland Security. The report exposes the reality of transshipment and origin laundering conducted through third countries by sanctioned nations such as China to evade U.S. tariffs.

The U.S. government views this as an organized fraudulent act threatening economic security, warning of harsh sanctions and stronger supply chain tracking systems. Countries like South Korea, Southeast Asia, and Mexico are closely monitoring the consequences of this White House measure. The report highlights the rapid increase in "global arbitrage" activities that circumvent tariff barriers, with China exporting raw materials and parts to third countries like Vietnam, Mexico, and South Korea, which then simply assemble and repackage the goods, changing their labels to "Made in Vietnam" or "Made in Mexico" before entering the U.S. market.

The report identifies specific sectors, including solar panels, secondary battery materials, steel and aluminum, auto parts, and low-cost clothing, as primary targets for transshipment scams. In response, the U.S. is tightening the definition of "substantial transformation" and implementing a raw material standard tracking system to prevent simple assembly or processing from altering the origin of goods.

The administration will also impose penalties on customs brokers and expand the supply chain blocklist, along with applying secondary sanctions to freeze assets in the United States and prohibit financial transactions with involved logistics companies.