US names India a part of ‘shadow transhipment network’ helping China evade Trump tariffs

A White House report has described India as a major part of a “shadow transhipment network” that allowed Chinese goods facing high US tariffs to enter the American market by re-routing them through third countries facing lower tariffs. It says this cost the US.

The report calls for firm action against countries enabling the rerouting of tariffed goods to evade US law, including immediate interdiction, penalty tariffs, sanctions, and potential loss of market access. The bill’s sponsors named India as one of five target economies even as US.

What Happened

The bill permits the executive to act against China, India, Slovakia, Hungary and Azerbaijan. Its sponsors said the rate should be pitched high enough to deter Chinese and Indian buying.

• The report traces the origins of the problem to 2018, when the Trump administration imposed Section 301 tariffs on select Chinese goods to remedy America’s growing trade deficit with China.

• (PTI File)In the report titled “The Great Transhipment Scam”, US President Donald Trump's adviser Peter Navarro estimates the value of potentially illegal transhipment at roughly $60 billion.

• It was released amid a downturn in India-US relations and six days after the US Senate on Friday last approved, by 86 votes to 11, a bill authorising tariffs of up to 100% on.

Key Details

India and the US have been attempting to seal a trade deal. The report says that increased economic pressure on US manufacturers from transshipped Chinese goods has led to serious economic consequences for America.

• India was slapped with a 25% additional levy in August last year, which has since been removed after trade negotiations.

• The White House report traces the origins of the “shadow transhipment network” to 2018, when the Trump administration imposed Section 301 tariffs on select Chinese goods to remedy America’s growing trade deficit with China.

• Under a central case of $75 billion in annual illegal transhipment, the report estimates approximately 450,000 jobs displaced; $113 billion to $150 billion in reduced annual gross domestic product; and $19 billion to $26.

Why It Matters

These figures are model-based estimates rather than observed job counts, it says.

• It points to the Pune–Gujarat–Chennai corridor as one that has benefited from Chinese transhipment of electric pumps and compressors while hurting US manufacturers in cities like Cincinnati, Dayton, and Columbus in Ohio.

• The report says enabling US goods to enter the Chinese market at lower tariff rates has allowed specific corridors within India to benefit economically at the expense of their American counterparts.

What Reports Say

Coverage of the story so far points to:

• Continued reporting by Hindustan Times as more details emerge