China, the European Union and Singapore have all rejected the Great Transshipment Scam report, released Thursday by the White House’s Office of Trade and Manufacturing Policy, which accuses 40 economies of helping funnel Chinese-made goods into the United States under false origins.
The report claims the rerouting of goods through what it calls a ‘shadow transshipment network’ has cost the US as much as $303 billion.
Governments push back on Great Transshipment Scam report claims
A Chinese embassy spokesperson in Washington DC said Beijing ‘firmly opposes’ the over-stretching of national security justifications to suppress Chinese enterprises, and warned it would take steps to safeguard its own interests.
Arianna Podesta, spokesperson for the European Commission, said the EU continues to engage with the US on both tariff and non-tariff issues, but that its rules framework and regulatory autonomy are not ‘up for negotiation’.
Singapore’s Ministry of Trade and Industry (MTI) said on 15 August that it ‘takes trade compliance seriously’ and ‘does not condone businesses using their association with Singapore and using fraudulent and dishonest means to circumvent or violate the laws and regulations of other countries’.
What the White House report alleges
The White House’s report defines illegal transshipment as relabelling, repackaging, re-invoicing, minor processing or making false country-of-origin claims, all intended to secure tariff treatment that would not apply if goods’ true economic origin were declared.
According to the White House Council of Economic Advisers, potential illegal transshipment currently falls in the range of $34.2 billion to $89.6 billion. The White House separately claims 450,000 jobs have been displaced, annual GDP has been cut by $113 billion to $150 billion, and federal revenue losses range between $19 billion and $26 billion.
The Center for Strategic and International Studies, a Washington-based think tank, defines transshipment as the movement of goods from one country to another via an intermediate stop that changes the declared country of origin. Customs officials become concerned when little to no value is added at that intermediate point.
Since the first Trump administration imposed tariffs on Chinese imports in 2018, many companies have rerouted supply chains through third countries such as Vietnam and Mexico, using them for final assembly of goods made with Chinese components. Because some value is added in those countries, customs enforcement treats the finished goods as products of those nations rather than of China.
The shift has been reflected in trade data. According to a post by trade analyst Ajay Srivastava on X, US imports from China fell from $525.8 billion in 2017 to $327.5 billion in 2025, a drop that has coincided with rising import volumes from several of the economies named in the White House report.
The 40 named economies are divided into three tiers. Tier 1, labelled ‘diversified scale leaders’, includes Canada, Japan, South Korea, Taiwan, Israel, Mexico, India and Europe. Tier 2 covers Brazil, Malaysia, Indonesia, Thailand, Turkey and Vietnam. Tier 3, described as ‘small, opportunistic Chinese targets’, includes Singapore, Myanmar, the Philippines, Uzbekistan, Kazakhstan, Argentina, Chile and Colombia.
The report did not specify any enforcement action against China or the other economies listed. It did outline plans to develop an ‘AI-enabled detective border’ to ingest and analyse global trade data to identify illicit transshipment activities.
Song Seng Wun, an economic adviser at Singapore-based fintech company SDAX, said simply being named carries its own pressure. ‘By naming Singapore, the US is putting compliance pressure on the region’s largest gateway and signaling that scrutiny will extend to major transshipment hubs, not only manufacturing centers,’ Song told The Business Times.
