China Transshipment Tariffs 2026: What the 40+ Country Crackdown Means for Importers

Published August 16, 2026By ABD Legacy LLC

On August 13, 2026, the White House Office of Trade and Manufacturing Policy released "The Great Transshipment Scam," a report accusing more than 40 countries of serving as conduits that let Chinese goods enter the United States while dodging tariffs. For importers and compliance teams, the report is more than a political flashpoint — it is a warning that country-of-origin declarations and transshipment routing are under new scrutiny.

Here is what the report says, how Beijing responded, and what it means for your tariff calculations — including why transshipment never changes the rate you actually owe.

Why the US is accusing 40+ countries of transshipment

The report alleges that China "is laundering its exports through more than 40 countries" — shipping goods through lower-tariff jurisdictions before they enter the US market, so the goods appear to originate somewhere other than China and avoid Section 301 surcharges. Named in the report:

Tier 1: Canada, the European Union, India, Israel, Japan, Mexico, South Korea, Taiwan
Tier 2: Brazil, Indonesia, Malaysia, Thailand, Turkey, Vietnam
Tier 3: 24 additional states including Panama, Cambodia, the UAE, and Kenya

If your shipments transit any of these countries, the goods may still face the same duty treatment as direct China-origin shipments — the report is about where manufacturing actually happens, not where a vessel refuels. For the current China tariff rates and Section 301 surcharges, and for transit-point context on US tariff rates by country, see our guides.

Beijing's rejection of the 'transshipment scam' framing

Chinese officials rejected the report's framing. Per China Daily, the Chinese Embassy spokesperson in Washington said China "firmly opposes unilateral tariff measures and the over-stretching of national security justifications," and that "tariff and trade wars produce no winners." A separate China Daily report adds that "any unilateral actions or agreements concerning transshipped goods must not target or harm the interests of third parties," and that China will take necessary steps to safeguard its own interests. Beijing argues the shifts reflect normal supply-chain diversification, not evasion.

The reported scale of lost tariff revenue

The report estimates the US loses "tens of billions of dollars" annually to transshipment. The Hill's headline figure of $19 billion to $26 billion a year matches the report's central case. Five flow estimates — from $40 billion (Goldman Sachs) to $303 billion (Altana) — produce annual tariff-revenue losses ranging from roughly $10 billion under the narrowest case to more than $100 billion under the broadest, at illustrative tariff differentials of 25–45%. For the enforcement picture behind those numbers, see our latest Section 301 updates for China-origin goods.

What transshipment allegations mean for your tariff calculation

If your shipments transit a country on the report's list, the goods may still be subject to China-origin Section 301 rates if the true country of origin is China. Transshipment does not change the origin determination — Customs looks at where substantial transformation occurred, not where the ship stopped. A country appearing on the report's list is not a finding against your specific shipment, but it raises the odds of origin verification. See our step-by-step guide on how to calculate import duties from China for the mechanics.

What this means for your tariff calculation

If your goods merely pass through a listed country (Panama, Malaysia, UAE, etc.), your duty calculation still uses the true country of origin, not the transit point.

If a supplier routes China-origin goods through another country to change the declared origin, the Section 301 surcharge still applies — and you may face penalties beyond the duty gap.

Run the calculator with the true origin country to estimate what you owe; do not base your rate on the transshipment point.

Red flags for transshipment schemes

An invoice or bill of lading that lists a different origin country than the actual manufacturer.
Final assembly or repackaging in a transit country that does not amount to substantial transformation.
Unusually low declared values, or suppliers that frequently switch declared origin countries.
Shipments routed through countries with weak customs enforcement or through duty-free zones without documentation of the underlying manufacturing.

Compliance actions to take now

Country-of-origin compliance is where the report's enforcement signal lands first. Importers who treat it as a documentation exercise rather than a supply-chain audit are the ones CBP will examine first.

Verify country of origin with your suppliers — get written documentation (manufacturing records, certificates of origin) for the actual production location, especially if goods transit any listed country.
Audit your supply chain for transshipment risk — flag any routing that changes the declared origin without changing where manufacturing actually happens.
Re-run your tariff calculation at the true origin country and confirm whether Section 301 surcharges apply to your classifications.
Keep origin documentation on file — if CBP asks, you will need to show substantial transformation occurred where you declared.
Monitor enforcement developments — the report signals stricter origin verification ahead; review your compliance program before a shipment is examined, not after. It follows the Section 301 expansion covering 60 countries earlier in 2026, part of the same enforcement push.

Run your actual shipment details through the tariff calculator 2026 — select the true country of origin (not the transit point), enter your HTS classification and import date, and it will show the Section 301 layer alongside your base duty, so you can see your real exposure to the transshipment crackdown instead of guessing.

FAQ

Q: What is the White House "Great Transshipment Scam" report?

A: Released August 13, 2026 by the White House Office of Trade and Manufacturing Policy, the report accuses more than 40 countries of serving as conduits that let Chinese goods enter the United States while dodging tariffs. It estimates the US loses tens of billions of dollars a year to transshipment, with a central case of $19 billion to $26 billion annually.

Q: Which countries are named in the transshipment report?

A: Tier 1: Canada, the European Union, India, Israel, Japan, Mexico, South Korea, and Taiwan. Tier 2: Brazil, Indonesia, Malaysia, Thailand, Turkey, and Vietnam. Tier 3: 24 additional states including Panama, Cambodia, the UAE, and Kenya.

Q: Does shipping through a listed country change my tariff rate?

A: No. Transshipment does not change the country-of-origin determination — Customs looks at where substantial transformation occurred, not where the ship stopped. If the true origin is China, Section 301 surcharges still apply even if goods transit a listed country.

Q: How do I check whether my shipments face transshipment risk?

A: Verify country of origin with written supplier documentation, audit supply chains for routing that changes declared origin without changing manufacturing, re-run your tariff calculation at the true origin country, keep origin documentation on file for CBP, and monitor enforcement developments.

Sources

All sources verified live at publication (2026-08-16); some outlets block automated requests, and The Hill's coverage was verified via AP and the primary report.

Disclaimer: This article is for general information only and is not legal advice. Tariff rates, origin rules, and enforcement actions change quickly; consult a licensed customs broker or trade attorney for guidance on your specific shipments.