US transshipment ‘scam’ claims put Asean exporters in a bind

White House report names global transshipment networks

The White House has released a report titled "The Great Transshipment Scam" that accuses China of using transshipment networks to circumvent US tariffs, naming more than 40 countries as alleged accomplices. According to coverage by Crude Oil Prices Today | OilPrice.com, the document, produced by the Trump Administration, alleges that Chinese-origin goods are routed through lower-tariff jurisdictions and re-entering the US market under new national identities, allowing Beijing to maintain its US-bound exports.

The report, as described by OilPrice.com, categorizes these countries into three tiers. Azerbaijan, Georgia, Kazakhstan, and Uzbekistan are designated as "Tier III" states, defined as "smaller economies with lower absolute transshipment volumes but specific weak-link advantages – including low-cost labor, free zones, port or border access, bonded warehousing, niche assembly capacity … or limited customs enforcement."

The report also notes that these four states are participants in China's Belt & Road Initiative, stating that their involvement in tariff evasion "can therefore reinforce commercial dependencies created through the Belt and Road Initiative." It further highlights that Azerbaijan and Georgia provide "rail and dry-port transit, consolidation, and overland-to-maritime connections." OilPrice.com also notes that the report estimates the cost of Chinese-led tariff evasion to the US Treasury at between approximately $40 billion and $303 billion annually, depending on methodology and definition.

The report argues that the harm extends beyond tariff revenue loss, contending that evasion widens the effective trade deficit, displaces domestic production, reduces GDP growth, and lowers federal tax receipts. It also criticizes Trump's predecessors for allowing China's entry into the WTO, asserting they turned a collective blind eye to what the administration calls unfair trade practices.

Proposed countermeasures and regional impact

To combat these networks, the report proposes the development of an AI-driven monitoring system called "America's Detective Border," which would continuously ingest and analyze global trade data to reveal inconsistencies. However, as OilPrice.com reports, the document concludes that "whether these measures will be sufficient to curb the broader budgetary and economic costs imposed by the Great Transshipment Scam remains to be seen."

The report's naming of countries has raised concerns about diplomatic fallout. OilPrice.com, which covers this broad global angle, notes the report's implications for Azerbaijan, Georgia, Kazakhstan, and Uzbekistan, all of whom have seen improved diplomatic relations with the US since 2025. The report's criticism could hamper US initiatives in the region, including a US-brokered peace deal and access to critical minerals. The four states are also all nodes in the Middle Corridor trade network, promoted by the United States and European Union to boost trade between Central Asia and the West.

Southeast Asian exporters in the spotlight

Focusing on Southeast Asia, the South China Morning Post reports that the White House named nine countries in the region as part of what it called a global "Shadow Transshipment Network." The report allegedly claims that Chinese-origin goods are being moved through lower-tariff jurisdictions in order to dodge US tariffs. Analysts, as quoted by the Post, said the report could "create fresh uncertainty" for Southeast Asian economies that have benefited from "China plus one" manufacturing, where companies move some production to Vietnam, Malaysia, Thailand, and Indonesia, among others. However, they also caution that Washington risks blurring the difference between deliberate tariff evasion and legitimate supply-chain diversification.

International trade specialist Barrett Bingley, Asia regional director at the Asia-Pacific Foundation of Canada, told the Post that "A supply chain touching China is different from illegal transshipment, and we cannot let [Peter] Navarro gaslight the region on this," referring to the White House trade adviser who led the report. "A multinational corporation moving production to Vietnam, Malaysia, Thailand or Indonesia can be doing real diversification, not just slapping a new label on Chinese goods."

Perspectives

Trade specialist Barrett Bingley

Barrett Bingley (Asia-Pacific Foundation of Canada) argues that the report's broad framing risks conflating genuine supply-chain diversification with illegal transshipment, emphasizing that corporations moving production to Southeast Asia may be doing real manufacturing, not merely relabeling Chinese goods.