A new White House report reveals that the United States is losing between $19 billion and $26 billion in annual tariff revenue. This loss is attributed to goods, primarily from China, being routed through third countries to avoid U.S. import duties.
The report highlights that China responded to tariffs implemented in 2018 by utilizing a practice known as transshipping. This involves sending goods to various nations, ranging from Mexico to Malaysia, for packaging and limited assembly to dodge higher levies by moving products through countries with lower tariffs.
White House trade adviser Peter Navarro told reporters that China is laundering its exports through more than 40 countries. These efforts allow China to send billions of dollars worth of goods into the U.S. while skirting high tariffs.