US claims China-led ‘Great Transshipment Scam’ costs it billions

The United States has accused China of orchestrating a massive customs loophole that it says is costing American taxpayers billions of dollars each year. Washington calls the practice the “Great Transshipment Scam.” Under the scheme, goods made in China are sent to a third country—often Vietnam, Malaysia, or Mexico—where they receive minimal processing or new labels. They are then shipped to the U.S. as if they originated from that third country. This allows exporters to avoid the high tariffs Washington has placed on Chinese products. U.S. officials say the tactic undermines trade enforcement and hurts American manufacturers. The claim was made in a new government report that did not provide exact dollar figures but described the losses as “in the billions.” The report also warns that the practice is not limited to a few companies. It describes a coordinated effort that involves logistics firms, customs brokers, and overseas factories. China has not officially responded to the latest accusation. In the past, Beijing has denied encouraging such schemes and has called for dialogue on trade disputes. The U.S. is now considering stricter rules for verifying the true origin of imported goods. Any new measures could raise costs for global supply chains and affect retailers and consumers in the U.S.