White House Accuses China of $26 Billion Tariff Evasion Scam

The White House released a report on Thursday titled "The Great Transshipment Scam," alleging that Chinese exporters route goods through more than 40 countries to evade tariffs imposed by President Donald Trump. The administration claims Chinese companies use fake declarations, deceptive labeling, and minimal assembly in third-party nations—including Canada, Mexico, Japan, South Korea, Israel, and the European Union—to hide the original country of origin.

U.S. officials estimate the scheme costs the United States between $19 billion and $26 billion in lost annual tax revenue. Other reports suggest the volume of goods moved through these methods ranges from $30 billion to $300 billion. White House trade adviser Peter Navarro described the practice as a long-standing effort by communist China to launder its exports.

Liu Chang, a representative for the Chinese Embassy in Washington, D.C., rejected the allegations, characterizing them as baseless economic coercion. These accusations come as President Trump and Chinese leader Xi Jinping prepare for a meeting in Washington this September to address ongoing trade tensions.