US targets India, 40+ nations in tariff-dodging ‘transhipment’ crackdown

WASHINGTON DC: A new report by the White House Office of Trade and Manufacturing Policy on Thursday accused more than 40 countries of helping Chinese exporters evade US tariffs by routing goods through third-party territories, relabelling them, or falsely claiming a non-Chinese country of origin, a practice it called the "Great Transhipment Scam."

The report categorises the 40-plus nations into three tiers. India is placed in Tier 1 ("Diversified Scale Leaders") alongside major economies like Canada, the European Union, Israel, Japan, Mexico, South Korea, and Taiwan, described as large industrial bases where transhipment risks are embedded within legitimate trade.

Tier 2 ("Significant Economic Integration with China") includes Brazil, Indonesia, Malaysia, Thailand, Turkey, and Vietnam, while Tier 3 ("Small, Opportunistic Targets") includes Bangladesh, Cambodia, the Philippines, Singapore, Sri Lanka, and the UAE.

Senior trade adviser Peter Navarro explicitly named India during a briefing, warning that as the US imposes higher tariffs, to deter countries like India and Vietnam attempting transhipment.

"This is about the 40-plus countries that are enabling the transshipping, and as we impose higher tariffs on other countries, India, Vietnam, down the line, they're going to try this transhipment too. Our message is simply that the way to pay less is not to cheat; it is to stop dumping, respect intellectual property, drop your barriers to American goods and move towards reciprocity. Our warning to the lower tariff countries facilitating and enabling the transshipping is this: preferential access to the American market is not a license to launder somebody else's exports, said Navarro.

The report cited examples such as Chinese electric motors fitted into recliners in Vietnam or "screwdriver factories" performing minimal assembly to disguise a product's origin without achieving "substantial transformation." The crackdown coincides with complex trade talks between Washington and New Delhi regarding a reciprocal tariff deal, further complicated by US pressures concerning India's purchases of Russian oil. (ANI)

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