China rejects US transshipment report
China's Commerce Ministry on Thursday (August 20, 2026) rejected a US report accusing its exporters of routing goods through Mexico and other countries to avoid US tariffs, calling it a "typical exercise in unilateralism and protectionism."
He Yadong, a spokesman for the ministry, told a regular press briefing in Beijing that the report "ignored facts and distorted reality by treating normal international trade and investment as fraud," and accused Washington of "blaming external factors for its own economic problems."
"The high differentiated tariffs imposed by the United States are the real cause threatening the security of global supply chains," He said, demanding an immediate end to what he called irresponsible accusations and pledging that China would continue developing commercial cooperation with all parties on the basis of equality and mutual benefit.
The White House released the 25-page report on Thursday, branding the practice "The Great Transshipment Scam." The document claims Chinese firms have systematically diverted goods through lower-tariff jurisdictions since the US kicked off its trade war with China in 2018, using limited assembly, relabelling, repackaging, re-invoicing and false country-of-origin declarations to disguise Chinese-origin products.
The report estimates the annual value of transshipped goods at anywhere between US$40 billion and US$303 billion, and also says the US is losing annual tariff revenue of about $19 billion to $26 billion on goods, largely from China, transshipped through third countries. Its estimates of 450,000 American jobs and up to US$150 billion in lost output are presented as model-based illustrations, although the text concedes that the shift in US import sourcing after 2018 does not prove all displaced Chinese trade was illegally diverted.
The report was released hours after word emerged that Mexico was preparing to restrict Chinese products further.
Separate drone tariffs draw Beijing's opposition
In a related development, China also said it "firmly opposes" new US tariffs on imports of unmanned drones and their components, after President Trump announced duties of up to 100% last week. Mr. Trump justified the decision on national security grounds, according to a White House statement, as Washington seeks to reduce reliance on imports in an industry China dominates.
Most of the new tariffs are due to take effect on September 3. Beijing urged Washington to "immediately withdraw" the planned levies, with He Yadong telling reporters that the measures "overstretch the concept of national security (and) discriminate against relevant Chinese products."
"(The tariffs) disrupt the global drone supply chain and further undermine a fair and competitive market environment," he said.
Chinese company DJI, founded in 2006, has captured more than two-thirds of the global drone market in recent years, according to several studies. Since 2022, DJI has been on a US list of Chinese firms linked to the country's military and subject to restrictions on access to US technology. DJI has fought its inclusion on the list, insisting that it was not owned or controlled by the military.
Perspectives
China
He Yadong described the US report as "disregarding facts and distorting right and wrong," aimed at "suppressing and blocking Chinese products," and called it a "typical exercise in unilateralism and protectionism."
United States
The White House report asserts that Chinese exporters have "increasingly routed goods through third countries … where limited assembly, finishing, repackaging, relabelling or documentation changes could create the appearance of a different national origin," and justifies new drone tariffs on national security grounds.