Some 40 nations, including Singapore and India, risk of being used by Chinese exporters to evade US tariffs, a White House report said yesterday (Aug 13).
Titled “The Great Transshipment Scam,” the report frames the routing of Chinese goods through an intermediate lower-tariffed country by concealing the true origin.
It also said the administration will use an artificial intelligence-powered “Detective Border”, among other initiatives, to help crack down on illegal transshipments.
“The message to the world is simple. The age of untraceable illegal transshipment is over,” the report said.
The report does not say what immediate action will follow. In August 2025, the US announced an additional 40 per cent tariff specifically on goods determined to have been illegally transshipped to evade duties.
Using estimates from government and private-sector studies, the report estimates that tariff-evading transshipments may have robbed the US of customs revenue in the range of US$40 billion (S$51.2 billion) to US$303 billion.
“The available data show a substantial reallocation of US import sourcing following the 2018 tariffs. As China’s direct share of US goods imports declined, the combined share supplied by identified transshipment countries increased,” the White House report said.
It added that the 40 lower-tariff countries have become the launchpads and hubs of a new evasion architecture, namely “products made largely in China, lightly touched abroad and exported to America under new identities”.
But this relationship does not establish that all displaced Chinese trade was illegally transshipped.
“Some of the shift reflects legitimate changes in production, investment and sourcing. However, the timing, magnitude and direction of the two trends support further investigation of the extent to which tariffed goods were rerouted through third countries.”
The 40 countries include Singapore and India, and range from Mexico and Canada to the European Union, India, Japan and South Korea, are identified in the report as participants in the “shadow transshipment network”.
The report also said China-linked exporters may use these jurisdictions for both limited production activity and logistics side-routing.
The report warned the 40 countries that as their local export sectors and transportation networks become increasingly dependent on Chinese inputs, logistics and capital, “Beijing may gain additional commercial and geopolitical leverage while preserving indirect access to the US market”.
Singapore has repeatedly stated in the past that it takes trade compliance seriously.
Singapore Customs, in response to media queries in September 2025, said: “Singapore’s legislative and regulatory framework governing transshipment is consistent with international best practices and rules, including those from the World Customs Organization, and seeks to facilitate trade through greater transparency and predictability for businesses.”
The agency added that transshipment in Singapore refers to the movement of goods from their source to their destination via Singapore, involving a change from one conveyance to another.
“Transshipped goods do not originate from Singapore and are not for domestic circulation or storage. Their transshipment through Singapore does not change their country of origin (i.e. they cannot be relabelled as originating from Singapore).”
Companies transshipping goods through Singapore must fully comply with the Republic’s laws and regulations, said Singapore Customs, adding that the agency works closely with international counterparts to detect and take action against illicit goods imported, exported or transshipped through the nation.
The report is part of the Trump administration’s efforts to rebuild the US leader’s tariff regime after it was undermined by a court decision earlier in 2026.
In July, a new 12.5 per cent levy, covering about a third of Singapore’s domestic exports to the US, was imposed after White House alleged that the Republic and dozens of other economies failed to adopt and effectively enforce prohibitions on trade in goods produced with forced labour. THE STRAITS TIMES
