White House claims $19-$26 billion lost annually as nations evade U.S. tariffs

A recent White House report warns that transshipment of imports through dozens of intermediary countries is depriving the U.S. Treasury of $19 billion to $26 billion in annual tariff revenue. The analysis highlights China’s 2018 response, where products were sent to locations like Mexico and Malaysia for minimal processing before re-entering the U.S. market, masking a decline in direct Chinese imports while sustaining Beijing’s manufacturing growth.

Peter Navarro, the administration’s trade adviser, noted that over 40 nations are involved in this “transshipment scam” and suggested future trade frameworks will penalize participating partners. The document also references broader estimates ranging from $34.2 billion to $303 billion in goods transshipped each year, using $75 billion as a baseline for revenue loss calculations. To combat the issue, U.S. Customs and Border Protection is piloting an artificial-intelligence system to flag falsified country-of-origin filings, allowing retroactive tariff assessments. The report arrives ahead of a planned September visit by Chinese leader Xi Jinping, underscoring ongoing trade tensions.