White House Targets Transshipment Loophole to Recover Tariff Revenue

The White House trade office released a new analysis indicating that foreign exporters are routing goods through more than 40 third-country destinations to evade U.S. tariffs, costing the Treasury an estimated $19 billion to $26 billion each year. The study, prepared by the Council of Economic Advisers in partnership with the Commerce Department and Goldman Sachs, focuses on China, India, Mexico and Vietnam as the primary transshippers. Trade adviser Peter Navarro said the administration is piloting an artificial-intelligence system at U.S. Customs and Border Protection (CBP) to flag false origin claims and apply retroactive duties.

Washington ExaminerWhite House says it's losing $19B-$26B a year in revenue as countries dodge tariffs

President Donald Trump imposed high tariffs on a broad range of imports—including finished goods, components and raw materials—to protect domestic manufacturers. Those tariffs have faced multiple legal challenges, and the Supreme Court overturned several in February. The same period saw the U.S. trade deficit widen to $371 billion, about $189 billion lower than the prior year’s figure, underscoring the fiscal pressure on the administration.

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• $75 billion in goods are estimated to be transshipped annually, a central figure used to calculate revenue loss.

White House says it's losing $19B-$26B a year in revenue as countries dodge tariffs

• Private-sector and government estimates place the total value of transshipped goods between $34.2 billion and $303 billion per year.

White House says it's losing $19B-$26B a year in revenue as countries dodge tariffs

• CBP’s AI pilot could retroactively assess higher tariffs for up to a year, potentially adding billions of dollars to annual tariff collections.

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CBP officials indicated that once a shipment is flagged, importers must verify origin, and the agency may apply the higher tariff to all of the importer’s shipments from the previous year.

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• “For years, the great transshipment scam has let communist China launder its exports,” — Peter Navarro, the White House trade adviser

White House says it's losing $19B-$26B a year in revenue as countries dodge tariffs

• “When we connect the product to the factory, the factory to its owners, and the paperwork to the physical facts, tariff laundering becomes a much more dangerous business,” — Peter Navarro, the White House trade adviser

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• “Illegal transshipment is not just a technical customs violation. It is a deliberate attempt to evade U.S. tariffs, undercut American workers and manufacturers, and deprive the American people of billions of dollars in revenue,” — Treasury Secretary Scott Bessent, added treasury secretary

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