India has been named among more than 40 countries the US says could be used as transit points for Chinese goods seeking to evade American tariffs.
BY PC BUREAU
August 14, 2026: India has been listed by the United States among more than 40 countries whose trade routes and manufacturing networks Washington says could be exploited to help Chinese exporters sidestep steep US tariffs.
The warning is contained in a report prepared by White House trade adviser Peter Navarro, which accuses Chinese companies of using a network of third-country markets to disguise the origin of goods before sending them to the United States.
The report, titled “The Great Transshipment Scam,” claims that Chinese goods are sometimes routed through other countries and subjected to limited processing, repackaging, relabelling or paperwork changes before being exported as products originating elsewhere.
Navarro described the alleged practice as a major channel for Chinese goods to enter the US market while avoiding tariffs imposed directly on Chinese imports.
“For years, the great transshipment scam has let Communist China launder its exports through more than 40 countries,” Navarro said.
The countries and trading partners identified in the report include India, Canada, Taiwan, Mexico, Japan, South Korea and Vietnam, along with the European Union.
🇮🇳🇺🇸 “India is well on our radar screen,” says Peter Navarro.
The comment comes after a White House report accused India and other nations of helping Chinese goods evade U.S. tariffs.
A trade story worth watching. pic.twitter.com/hr3tZsXRCC
— Sumit Kapoor (@moneygurusumit) August 14, 2026
India among countries under scrutiny
The report does not accuse the Indian government of deliberately helping China evade US duties. Instead, it places India among jurisdictions that Washington believes have an elevated risk of illegal transshipment because of their growing manufacturing links and extensive trade with China.
The report highlighted industrial activity stretching across Pune, Gujarat and Chennai, arguing that Chinese-origin industrial equipment could potentially enter Indian supply chains before being exported to the US.
“A Chinese pump that leaves Pune as Indian is a pump not machined in Cincinnati, Dayton or Columbus,” Navarro said.
The example reflects the administration’s concern that Chinese manufacturers could use India’s industrial infrastructure and supply chains to gain access to the US market under a different country-of-origin label.
How tariff evasion allegedly works
The US report says Chinese companies increasingly turned to third countries after Washington imposed Section 301 tariffs on Chinese imports in 2018.
According to Navarro, goods can be sent through another country where they undergo relatively minor processing or are repackaged, relabelled or accompanied by altered invoices and routing information.
Such practices, the report argues, can create the impression that the products originated in the intermediary country even though most of their underlying Chinese content remains unchanged.
Countries with lower labour costs, weaker customs controls, permissive free-trade zones or preferential access to the US are described as particularly attractive for such operations.
The report also distinguishes between countries where transshipment risks are concentrated and economies where such activity may be difficult to separate from legitimate trade because Chinese-linked supply chains are deeply embedded.
Billions of dollars involved
The potential scale of the problem is enormous.
The report estimates that goods illegally transshipped through third countries could be worth anywhere between $40 billion and $303 billion a year, depending on the methodology and definition applied.
The unusually wide range reflects the difficulty of determining whether goods moving through several countries are part of legitimate global supply chains or deliberately rerouted to evade tariffs.
The issue has become increasingly important as companies have moved portions of their manufacturing away from China following years of US-China trade tensions.
Washington plans AI-powered checks
The Trump administration says it is preparing to use artificial intelligence to identify suspicious shipments.
Navarro said the White House is working with US Customs and Border Protection on an AI-based system described as a “detective border.”
The technology would analyse shipment records, trade routes, routing histories and other information to identify patterns that could indicate that goods declared as originating in one country actually have substantial Chinese origins.
The administration hopes the system will allow US authorities to focus investigations on high-risk shipments and supply chains rather than relying solely on conventional customs inspections.
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Supply-chain diversification under the microscope
The US concerns date back to Trump’s first presidency, when Washington and Beijing became embroiled in a major tariff confrontation beginning in 2018.
The resulting duties prompted businesses to diversify their supply chains, with countries such as Vietnam benefiting from companies seeking alternatives to Chinese production.
The new White House report argues, however, that genuine supply-chain diversification can exist alongside attempts to disguise Chinese-origin goods.
That distinction could become increasingly important for countries such as India, which are seeking to attract manufacturers looking to reduce their dependence on China.
The US report does not establish that Indian authorities or Indian exporters are systematically involved in tariff evasion. But being identified as a jurisdiction vulnerable to transshipment could mean greater scrutiny of Indian exports and more stringent checks on country-of-origin claims.
The report signals that as the Trump administration expands its tariff regime, the question of where a product is actually made — and how much of it is genuinely produced there — is likely to become a major issue in US-India trade relations.
