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The White House has dropped a sharp new report that calls out what it dubs “The Great Transshipment Scam.” The paper, led by Peter Navarro in his role as Director of the Office of Trade and Manufacturing Policy and Assistant to the President, says foreign exporters are routing goods through dozens of low-tariff countries to dodge U.S. duties. If true, this isn’t clever trade strategy — it’s theft that costs American workers, manufacturers, and taxpayers tens of billions of dollars every year.
What the White House report found about transshipment and tariff evasion
The report lays out big numbers: central estimates put illegal transshipment at roughly $75 billion a year, with broader measures reaching into the hundreds of billions. It says transshipment ranges from relabeling and repackaging to false invoices and phony country-of-origin claims. The administration ties the surge to past tariff moves and says imports from identified transshipment-risk countries rose as direct imports from high-tariff countries fell.
How the scam works and who pays the price
Here’s the simple math: when one country faces higher U.S. tariffs than another, criminals and opportunistic businesses can route shipments through the cheaper country to avoid duties. The report blames this practice for displacing roughly 450,000 U.S. jobs and cutting into GDP and federal revenue. That means lost factory jobs, hollowed-out supply chains, and less money for public services — all so some foreign middleman can pocket the tariff difference.
The Trump administration’s fix: Executive Order 14411 and “Detective Border”
The report doesn’t stop at finger-wagging. It points to concrete steps the administration has already taken, including Executive Order 14411 to tighten customs enforcement and force importers to be more accountable. It also pushes an AI-enabled “Detective Border” system for U.S. Customs and Border Protection to flag suspicious routing, ownership links, and document anomalies. Translation: fewer loopholes, more audits, and targeted interdictions — exactly what border enforcement needed yesterday.
Why this matters and what should happen next
Let’s be blunt: tariffs without enforcement are just theater. If America wants to protect its factories and workers, it must both set sensible trade rules and enforce them aggressively. That means funding modern detection tools, raising penalties for bad actors, and pushing partner countries to stop being convenient relays for fraud. The administration’s report is a good start — now it’s time to turn the policy paper into action and make sure the scam stops lining foreign pockets at America’s expense.
