Trojan Horse: US accuses more than 40 countries of massive fraud
Trojan Horse: US accuses more than 40 countries of massive fraud
The United States has accused more than 40 countries of helping China evade customs duties, according to a US government report titled "The Massive Re-Entry Fraud."
The document says China has been avoiding high US tariffs by routing its products through these countries with low tariffs. The report features a Trojan horse on its cover.
China has been using third countries to make minor changes to goods, rebranding, packaging or otherwise making them appear as if they were not made in China, thus avoiding high tariffs.
The White House says China and its companies have been moving goods to areas with cheap labor, loose customs controls, free trade zones, and easy access to the American market.
"Over time, these countries, now numbering more than 40, with low tariffs, have become a kind of platform and center for a new system of tariff evasion: goods manufactured mainly in China are minimally processed abroad and exported to America under new names," the report says.
The United States loses between $19 billion and $26 billion annually due to the circumvention of American tariffs.
"Under the base case, about 450,000 jobs are lost as a result of illegal transshipment of cargo worth $75 billion per year. This results in a loss of federal revenues of between $19 billion and $26 billion," the document says.
Peter Navarro, the White House trade policy director, said China used "extremely sophisticated" methods to organize re-shipments after the president imposed tariffs.
"For many years, a massive shipping fraud scheme has allowed communist China to launder its exports through more than 40 countries, siphoning tens of billions of dollars from our treasury and stealing the wages of American workers," he said.
Trump announced a 100 percent tariff on China in November 2025. He also threatened to impose tariffs on Canada if it makes a trade deal with China in late January. Trump said Canada made a "big mistake" by allowing China to increase imports of electric vehicles.