The White House released an analysis on Thursday estimating that U.S. tariff revenue losses from goods transshipped through third countries - principally those of Chinese origin - amount to about $19 billion to $26 billion annually.
The report, prepared by White House trade and manufacturing adviser Peter Navarro, identifies roughly 40 countries it considers to have an elevated risk of serving as sources of illegal transshipments. Many of these jurisdictions are associated with limited processing of goods, followed by relabeling and repackaging of components that originated in China.
India is specifically singled out in the report as one of China’s "biggest enablers," categorized as a top-tier transshipment-risk jurisdiction. The document estimates that India, Mexico and Vietnam accounted for about $67 billion in U.S.-bound goods allegedly transshipped from China in 2025, a volume the report says cost an estimated $28 billion in lost U.S. tariff revenue.
The timing of the report overlaps with trade talks between India and the United States. The report indicates India’s commerce ministry did not immediately respond to requests for comment and did not state whether it had received U.S. requests to curb the alleged transshipment of Chinese-origin products.
China’s embassy in Washington issued a response rejecting efforts that it characterized as attempts "to strike a deal at China’s expense" or actions that would disrupt industrial supply chains. The embassy added that should such situations arise, China would "resolutely take necessary measures to safeguard its legitimate rights and interests," according to an emailed statement quoted in the report.
Navarro’s report uses a range of estimates sourced from private-sector and government analyses to map the potential scale of transshipment in dollar terms. That range spans from $34 billion to $303 billion of goods per year. The report applies a central-case estimate of $75 billion in transshipped goods as its working assumption, and bases the $19 billion to $26 billion in lost import taxes on that central figure.
The report notes that routing Chinese products through neighboring jurisdictions such as Mexico or Canada can, in some instances, eliminate duties entirely. Applying the central $75-billion estimate, the authors calculate the transshipment volume could be linked to roughly 450,000 U.S. jobs displaced, counting both direct and indirect effects.
U.S. Census Bureau data cited in the report show imports from China declined to a 16-year low of $308.7 billion in 2025, while imports from Mexico and Vietnam have risen markedly in recent years. The report asserts that the drop in direct imports from China - driven in part by prior tariffs imposed during the Trump administration - has contributed to increased flows through third countries via transshipment.
To address suspected transshipment, U.S. Customs and Border Protection is deploying artificial intelligence tools aimed at improving detection. According to the report, learning models evaluate container markings, packaging patterns and X-ray imaging to identify mismatches between declared cargo and actual contents.
Contextual note - The report provides explicit estimates and observed trade patterns but also cites a broad range of possible values for total transshipped goods, reflecting uncertainty in measurement. The document pairs revenue-loss estimates with projected labor impacts and describes evolving enforcement tools being used by customs officials.