China, the EU, and Singapore push back against the White House's new ‘Great Transshipment Scam’ report

Beijing is batting away a fresh U.S. claim that other economies are helping Chinese-made goods slip into the American market with their origin obscured. On Thursday, the White House’s Office of Trade and Manufacturing Policy published a report called “The Great Transshipment Scam,” which says rerouting goods through 40 jurisdictions may have cost the U.S. as much as $303 billion.

China’s response was blunt. A Chinese embassy spokesperson in Washington said Beijing “firmly opposes” stretching national security arguments to suppress Chinese companies, and warned that it would take whatever steps were needed to protect its own interests. The report also drew pushback from governments named in it, including the European Union and Singapore.

The EU’s line was classic Brussels: cooperate, but don’t expect surrender. European Commission spokesperson Arianna Podesta said the bloc keeps engaging with the U.S. on tariff and non-tariff issues, but its rulebook and regulatory autonomy are not “up for negotiation”. Singapore’s Ministry of Trade and Industry took a different route, stressing on Aug. 15 that it treats trade compliance seriously and does not condone businesses using the city-state’s name to dodge or violate other countries’ laws.

The dispute turns on what counts as transshipment. The Center for Strategic and International Studies defines it as moving goods from country A to country C through country B, with the intermediate stop changing the country of origin. U.S. customs officials usually only worry when that middle stop adds little or no value — a fresh label on a finished product, basically. The White House says illegal versions can include relabeling, repackaging, re-invoicing, minor processing and false origin claims.

The problem is that global supply chains are messier than the accusation sounds. Since tariffs on Chinese imports began in 2018, many firms have shifted parts of their production through countries such as Vietnam and Mexico, where goods may get final assembly using Chinese components. The White House Council of Economic Advisers says potential illegal transshipment is in the range of $34.2 billion to $89.6 billion, with 450,000 jobs displaced, GDP hit by $113 billion to $150 billion, and federal revenue losses of $19 billion to $26 billion. The report names 40 economies in total, but stops short of saying what punishment, if any, would follow. It does say the U.S. wants an AI-enabled border system to spot suspected cases by chewing through global trade data.