Trump White House says it's losing $19B-$26 billion a year in revenue as countries dodge tariffs

The Trump White House has reported significant annual losses in U.S. tariff revenue, estimating that countries are circumventing trade barriers by routing their exports through third nations. The administration projects these losses to range between $19 billion and $26 billion each year.

A new report highlights China's strategy of sending goods to countries such as Mexico and Malaysia for packaging and limited assembly after new tariffs were imposed in 2018. This practice, termed "transshipping," creates a misleading appearance of reduced imports from China, while enabling Beijing to sustain and grow its manufacturing sector. This continued growth poses a challenge to U.S. factories and employment.

White House trade adviser Peter Navarro stated that China is "laundering its exports" through more than 40 countries. He emphasized that the issue extends beyond China, with other nations enabling tariff avoidance. Navarro asserted that new trade frameworks under the Trump administration will include provisions to penalize trade partners engaging in such practices.

The report estimates that between $34.2 billion and $303 billion worth of goods are transshipped annually to avoid tariffs, with a central figure of $75 billion used to calculate the lost tax revenue. To combat this, U.S. Customs and Border Protection has begun using artificial intelligence in a pilot program to detect falsified origin information. Importers found to have misrepresented the origin of goods can face retroactive tariffs dating back roughly a year.

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For years, the great transshipment scam has let communist China launder its exports.