The US has accused more than 40 countries of helping China avoid American tariffs by routing exports through markets facing lower import duties, raising the prospect of greater scrutiny for businesses operating across Chinese supply chains.
In a recent report, the White House names countries including Canada, India, Mexico, Japan and South Korea as part of a wider transshipment network that it claims has allowed Chinese goods to avoid tens of billions of dollars in tariffs.
Estimates cited by US officials suggest between $30 billion and roughly $300 billion in goods have been moved from countries facing higher tariffs through those subject to lower rates.
Transshipment itself refers to transferring goods through an intermediary country before they reach their final destination and is a normal feature of international trade. However, the US alleges that Chinese businesses have used third countries to conceal the true origin of products, including by repackaging goods to qualify for lower tariff rates. The White House described the alleged practice as "fraud cloaked in paperwork".
The report could have implications beyond US-China trade. Countries with close links to Chinese supply chains may face increased scrutiny over the origin of goods exported to the US, potentially adding compliance costs and risks for legitimate businesses as authorities seek to distinguish supply chain restructuring from tariff evasion.
This could become an important part of upcoming negotiations between Washington and Beijing, with President Donald Trump due to meet Chinese leader Xi Jinping in September.
Chang Pao Li, associate professor of economics at Singapore Management University, said Washington could argue that China has maintained access to the US market indirectly and therefore push for third-country routing to form part of any wider trade settlement.
However, China has rejected the US approach. A spokesperson for the Chinese embassy in Washington said "trade wars have no winners" and warned that actions concerning transshipped goods should not "target or harm the interests of third parties".
As the US increases its focus on how Chinese products move through global supply chains, businesses with manufacturing or processing spread across multiple countries could face greater pressure to provide clear evidence that goods legitimately qualify for the tariff treatment being claimed.