U.S. says Canada among China’s ‘biggest enablers’ in avoiding Trump tariffs

The Trump administration has accused China of orchestrating a vast scheme to circumvent U.S. tariffs through transshipment, labeling Canada as one of Beijing's "biggest enablers" in this practice. A new White House trade report, titled "The Great Transshipment Scam," alleges that China routes exports through third countries to take advantage of more favorable U.S. tariff rates, describing it as a "modern form of smuggling."

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In plain terms, illegal transshipment is smuggling disguised as trade, fraud cloaked in paperwork, and, in truth, nothing new.

The report identifies an estimated 40 countries, including Canada and Mexico, as part of this "shadow transshipment network." It claims that countries like Canada, which have diversified industrial bases and major export platforms, are used as "logistics-side nodes" where the primary activity is routing and re-exporting goods under new paperwork, rather than manufacturing.

This alleged network allows China to bypass the average U.S. tariff rate of over 26 percent. The report suggests that China can exploit tariff-free provisions under the Canada-U.S. Mexico Agreement (CUSMA) by sending goods into Canada or Mexico, which are then shipped to the U.S. without additional cost. The U.S. estimates it is losing between $19 billion and $26 billion in federal tax revenue annually due to these practices.

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The countries that comprise China’s Shadow Transshipment Network include many of America’s largest trading partners. China’s biggest enablers range from Mexico and Canada on U.S. land borders to the European Union, India, Japan, and South Korea.

While the report singles out Canada, it notes that the country has previously raised similar concerns about Chinese trade practices, particularly regarding the expansion of China's auto industry into Mexico during the Biden administration. Global News has reached out to Canada's International Trade Minister for comment on the White House report's allegations.

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The countries that comprise China’s Shadow Transshipment Network include many of America’s largest trading partners. China’s biggest enablers range from Mexico and Canada on U.S. land borders to the European Union, India, Japan, and South Korea.