White House estimates $19B–$26B in lost tariffs from transshipped goods

The White House estimated that transshipped goods cost the U.S. between $19 billion and $26 billion annually in lost tariffs, citing circumvention of trade restrictions through third countries.

The estimate, outlined in a report to Congress, highlights the scale of trade evasion linked to rerouting shipments via intermediary nations to avoid tariffs on targeted goods. While the report did not specify the origin or destination of the transshipped items, it emphasized the impact on U.S. customs revenue and enforcement efforts.

Officials attributed a significant portion of the evasion to supply chains involving China, where goods are often processed or relabeled in third countries before entering the U.S. market. The administration has previously raised concerns over China’s trade practices, including subsidies and industrial overcapacity, which it argues distort global trade flows.

The findings underscore challenges in enforcing tariffs amid complex global supply chains. Customs and Border Protection has increased scrutiny of transshipment, including audits and penalties, to curb revenue losses. The report did not detail specific enforcement actions or policy changes tied to the estimate.

The administration has not proposed new tariffs but has signaled a focus on tightening trade enforcement to address evasion. The estimate comes as the U.S. continues to review its trade policies, including tariffs imposed during the previous administration and ongoing negotiations with trading partners.