U.S. flags South Korea, Japan and EU over China-linked transshipment risks
A White House report listed Korea, along with Japan, Taiwan and the EU, as a pathway for China-linked goods to potentially evade U.S. tariffs.
U.S. President Donald Trump’s administration has listed Korea, Japan, Taiwan and the European Union among dozens of economies facing transshipment risks involving China-linked products, a White House report showed Thursday, as it seeks to tackle schemes to evade U.S. tariffs and other trade remedies.
The White House Office of Trade and Manufacturing Policy released the report, titled “The Great Transshipment Scam,” identifying some 40 countries associated with “elevated” transshipment risks, noting that Chinese exporters route goods through third countries, using methods such as relabeling, repackaging and false country-of-origin claims.
The report outlined its push to develop a “detective border” utilizing AI that would support U.S. Customs and Border Protection by integrating shipment data, routing histories and other information to help identify high-risk shipments and facilitate duty collection and other measures.
It classified Korea, Japan, Taiwan, the EU, India, Canada, Mexico and Israel as “diversified scale leaders,” highlighting their diversified industrial bases and major U.S.-bound export platforms where “transshipment risk is embedded within broad legitimate trade flows.”
The report listed Brazil, Indonesia, Malaysia, Thailand, Turkey and Vietnam as “scale leaders with significant economic integration,” noting they combine illegal transshipment volumes with deeper integration into China-linked supply chains, input sourcing, manufacturing platforms, logistics systems or regional rerouting channels.
The last category consisted of “small, opportunistic Chinese targets” that are smaller economies with lower transshipment volumes but specific “weak-link advantages,” including low-cost labor, port or border access, niche assembly capacity and preferential U.S. access that make them attractive targets for China-linked rerouting.
That category included Switzerland, Singapore, the Philippines, the United Arab Emirates, Chile and Colombia.
“By routing around the tariffs, China and its state-supported manufacturers and trading firms could push goods into jurisdictions with cheap labor, weak customs oversight, permissive free zones, or preferential U.S. trade access,” the report said.
“Over time, these lower-tariff countries, which number more than 40 today, became the launchpads and hubs of a new evasion architecture: products made largely in China, lightly touched abroad, and exported to America under new identities.”
Yonhap