US Accuses China of Using India and Other Countries to Evade Tariffs

Washington: The United States has accused China of using third countries to route its products into the American market in an effort to avoid high US import tariffs. A new White House report has identified India and more than 40 other countries as potential transit points for Chinese goods.

The report was released on August 13, 2026, by the White House Office of Trade and Manufacturing Policy. Titled “The Great Transshipment Scam: Rise, Scope, and Costs,” the 25-page report alleges that Chinese exporters are using trade routes through third countries to conceal or alter the origin of goods and avoid higher US tariffs.

According to the report, some Chinese products are first shipped to other countries, where they may undergo limited assembly, repackaging, relabeling or changes to documentation. The goods are then exported to the United States as products originating from another country that may face lower tariffs than Chinese goods.

The White House estimates that in 2025, roughly $67 billion worth of goods originating from China reached the United States through major trade hubs including Mexico, India and Vietnam. The administration estimates that such alleged tariff evasion could have cost the US government around $28 billion in potential tariff revenue.

The US administration says the issue extends beyond a handful of countries and involves a broader global network spanning more than 40 nations. White House trade adviser Peter Navarro has accused Chinese exporters of routing goods through different countries to conceal their origin and avoid higher US tariffs.

India Included in the Report

India has been identified in the report as one of the countries where there is a potential risk of Chinese goods being transshipped to the United States. Indian media reports have described India as being among the countries classified as higher-risk transit points.

However, the US report does not directly accuse the Indian government of deliberately helping Chinese exporters evade US tariffs. Instead, India and other countries are described as potential trade hubs that Chinese exporters could use to reroute goods.

India’s Global Trade Research Initiative has questioned the US allegations, saying Washington has not provided evidence identifying a specific Indian company or shipment as being involved in tariff evasion.

The research group also noted that the $67 billion estimate relates to potential transshipment through major hubs including Mexico, India and Vietnam, but the US report does not separately specify India’s share of that amount.

Indian trade experts have also argued that the use of Chinese raw materials or components in products manufactured in India does not automatically make those products Chinese-made. Determining a product’s country of origin depends on the extent of processing and the applicable trade rules.

Billions of Dollars in Potential Lost Tariff Revenue

The White House estimates that the alleged transshipment of Chinese goods through third countries could result in between $19 billion and $26 billion in lost US tariff revenue annually.

US officials argue that the practice expanded after Washington imposed additional tariffs on Chinese goods in 2018. According to the administration, Chinese exporters in some cases make only limited changes to products before declaring them as originating from another country.

US Plans AI-Powered Monitoring

The US government has also announced plans to use an artificial intelligence-based system to help detect suspected tariff evasion.

The system, known as “Detective Border,” is intended to analyze global trade data and identify unusual patterns involving shipping routes, countries of origin and the sources of components used in imported products.

US officials say the technology could help identify shipments where the declared country of origin may not accurately reflect where the goods were actually manufactured.

Growing US-China Trade Tensions

The report comes as trade tensions between Washington and Beijing remain high, particularly over tariffs and the flow of Chinese goods into the US market.

The US administration argues that Chinese products continue to reach American consumers through alternative trade routes despite tariffs imposed directly on Chinese imports, potentially putting US manufacturers and industries at a disadvantage.

The White House report identifies more than 40 countries, including US allies and major trading partners, as potential transshipment hubs. However, it does not directly accuse all of these countries of participating in tariff evasion with China. Instead, it warns that Chinese exporters could potentially use their trade networks to circumvent US tariffs.

The report specifically mentions India, but the claim that both India and Israel have been identified as routes for Chinese goods into the United States is not supported by the available White House report. Mexico, India and Vietnam are the three major potential transshipment hubs highlighted in the report.