Washington accuses China of evading tariffs through a transit network

The White House accuses China of routing billions of dollars' worth of goods through third countries in order to evade the tariffs introduced by President Donald Trump in 2018. According to the administration's estimates, this costs the United States between 19 and 26 billion dollars a year.

The report, twenty-four pages entitled "The great transit scam", identifies more than forty countries involved, from Mexico to Israel and including several European nations, in what it describes as a global shadow network through which Chinese tariff evasion moves.

The mechanism is simple. Goods pass through a third country in order to benefit from lower rates, and exporters disguise the origin of products through repackaging, relabelling and partial assembly before shipment to the United States.

Allies on the list

The document classifies Canada, the European Union, Japan and South Korea as countries at high risk of Chinese goods being rerouted, while acknowledging the legitimate nature of trade relations with these partners. An analysis by the Commerce Department estimates that last year around 67 billion dollars of goods transited from China through Mexico, India and Vietnam.

The administration is developing "Detective Border", an artificial intelligence system intended to help customs identify suspect shipments by examining routes, product data and ownership structures. The report warns that the era of untraceable illegal transit is over.

For those who export by the rules, the cost of all this is not theoretical. Tighter customs checks mean longer lead times, heavier administrative work and an obligation to document the origin of components along the whole chain. Swiss firms shipping to the United States already work with this verification of origin, and a widening of automated checks would make it more burdensome. It remains to be seen how well a system built to detect fraud will manage to tell it apart from ordinary trade.