White House reports $19B-$26B annual revenue loss from global tariff evasion
A new White House report released Thursday estimates that the United States is losing between $19 billion and $26 billion annually in tax revenue due to foreign nations routing exports through third-party countries to evade American tariffs.
The report emphasizes that Chinese manufacturers responded to 2018 trade duties by redirecting goods to more than 40 intermediate nations, including Mexico and Malaysia, for minimal assembly or repackaging prior to US entry. White House trade counselor Peter Navarro described the practice as “the great transshipment scam,” asserting that it masks the true volume of Chinese imports while undermining US domestic manufacturing, automotive, and electronics sectors.
The findings come ahead of a scheduled September visit to Washington by Chinese Leader Xi Jinping. Navarro indicated that future trade agreements negotiated by the Trump administration will incorporate strict enforcement mechanisms and penalties to punish countries facilitating trade re-routing schemes.