White House: US loses $26 billion annually due to countries' evasion of tariffs
The U.S. administration stated in a new report released Thursday that numerous countries are routing their exports to the United States through third countries to avoid U.S. tariffs, depriving the United States of tariff revenues estimated at between $19 billion and $26 billion annually.
The White House report indicates that China, in response to new tariffs imposed in 2018, began sending its goods to other countries, from Mexico to Malaysia, for packaging, assembly, and final export to the United States—a practice known as “transshipment.” This pattern has created the appearance of a decline in U.S. imports from China, but has allowed Beijing to continue expanding its industrial sector in ways that may threaten American factories and jobs.
Peter Navarro, a trade advisor at the White House, told journalists during a conference call that China is rerouting its exports through more than 40 countries, asserting that the issues raised by the report actually concern other countries that facilitate tariff evasion.
The report comes ahead of a scheduled visit in September by Chinese President Xi Jinping, whom President Donald Trump praised during his visit to Beijing last May.
For its part, the Chinese government has described its relationship with the United States as one of “strategic stability,” although its export-supportive government policies have destabilized automotive, metals, and electronics sectors in the United States, Europe, Japan, and elsewhere.
Navarro noted that other countries, such as India, might also resort to transshipment to avoid new U.S. tariffs, adding that new trade agreements negotiated by the Trump administration would include provisions to penalize trading partners that allow such practices.
The report includes a range of estimates on the volume of transshipment used to evade tariffs, relying on figures from both public and private sectors to estimate the value of goods shipped annually at between $34.2 billion and $303 billion. The report used a central figure of $75 billion to estimate the size of lost tax revenues.
To address this challenge, Navarro said the U.S. Customs and Border Protection agency has begun using artificial intelligence in a pilot program to curb transshipment. He stated that when it is determined that an importer has falsified a certificate of origin, export tariffs can be applied retroactively for one year.
- This news item is from The Associated Press (AP), translated from English by a reporter from Deutsche Presse-Agentur (dpa) based in Cairo.
