Aug. 14 (UPI) — The White House said the United States has lost out on up to $26 billion in tax revenue each year after Chinese exporters routed goods through other countries to avoid President Donald Trump‘s tariffs.
The administration made the allegations Thursday in a report titled “The Great Transshipment Scam.”
It said Chinese companies diverted goods through more than 40 countries with lower tariffs after Trump and China launched into a trade war in 2018. These alleged third-party countries include Canada, Mexico, Japan, South Korea, the European Union and Israel.
The report accused the Chinese companies of disguising the goods’ country of origin by performing limited assembly through the third country along with deceptive labeling, packaging and invoicing and through fake declarations. These actions created “the appearance of a different national origin,” the report said.
The scheme, the White House said, cost the United States between $19 billion and $26 billion in lost tax revenue each year.
“For years, the great transshipment scam has let communist China launder its exports,” White House trade adviser Peter Navarro told reporters, The Hill reported.
Liu Chang, a representative for the Chinese Embassy in Washington, D.C., told the South China Morning Post that China would move to safeguard its rights and interests.
“We firmly oppose any party seeking to strike a deal at China’s expense or engaging in baseless economic coercion that severely infringes upon the legitimate rights and interests of relevant enterprises and gravely disrupts the stability of global industrial and supply chains,” the representative said.
Other third-party countries named in the report include Indonesia, Malaysia, Thailand, Vietnam, Singapore, Cambodia, Laos, Myanmar, the Philippines, India, Bangladesh and Sri Lanka.
