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Or sign-in if you have an account.U.S. President Donald Trump speaks to reporters after stepping off Air Force One on August 11, 2026 in Joint Base Andrews, Photo by Anna Moneymaker/Getty ImagesThe Trump administration is developing an AI-powered “detective border” to crack down on trading partners suspected of enabling China to skirt tariffs on U.S. imports.Subscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.Subscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountorIn a report released Thursday, the White House Office of Trade and Manufacturing Policy accused dozens of countries of being part of China’s “shadow transshipment network,” sorting them “according to the scale of China-linked trade, the depth of their economic integration with China, and the weak-link advantages that make them susceptible to rerouting activity.”The values of these goods, described as flowing through third countries to evade levies on imports and other trade remedies, are based on analysis from two government and three private-sector sources.Breaking business news, incisive views, must-reads and market signals. 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Please try againAI supply chain firm Exiger provided a mid-range estimate of US$75 billion in illegally transshipped goods between February 2025 and February 2026, which corresponds a loss of tariff revenue between US$19 billion and US$34 billion.More than 40 countries are associated with elevated illegal transshipment risk, the report from White House trade adviser Peter Navarro’s office said, and “China’s biggest enablers range from Mexico and Canada on U.S. land borders to the European Union, India, Japan, and South Korea.”In addition to China preserving access to the U.S. market counter to U.S. trade policy, “the spoils of illegal transshipment also enrich the transshipping countries themselves,” the report said. “Local firms capture assembly fees, warehousing revenue, logistics margins, port charges, customs brokerage income, land rents, and export-processing-zone investment. Governments benefit from jobs, tax receipts, foreign investment, and trade growth.”Other named countries include Indonesia, Thailand and Brazil and Malaysia. Still others are noted for comparative advantages that can be exploited, like the cost of labor, strategic port access, lax customs enforcement or free trade zones.The trend isn’t new. When U.S. President Donald Trump imposed high tariffs on exports from China in his first term, many businesses responded by diversifying their supply chains, moving some manufacturing outside of China when possible. This so-called China +1 strategy spurred big investments in Vietnam, Cambodia and other countries, often by Chinese-owned factories.Upon returning to office, Trump unleashed a wave of country-specific duties with some of the highest rates aimed at U.S. allies and major trading partners. Tens of billions of dollars in tariffs have hit compliant importers especially hard.The White House’s report acknowledges these “tariff differentials” can increase the incentive to illegally transship, but said tools designed to “detect, deter and prevent” tariff evasion are being deployed. Those tools include an AI-powered “detective border” that will scan shipment data against routing histories, confirm production capacity and ownership relationships and even analyze packaging patterns and X-ray imaging at ports to detect mismatches between what’s declared and what’s actually in a container.U.S. trade enforcement authorities have for decades focused limited resources on cases with the biggest payout potential. Such cases are complex and often take years to build, meaning illicit goods often continue flowing into the U.S. market at below fair-market prices, undermining U.S. commerce.Illegal transshipment can be notoriously hard to detect and determining country of origin is complex, especially when imports are made from components manufactured in multiple countries. It’s unclear how much of the supply chain shift outlined in the report reflects illicit activity rather than legitimate changes to global production and trade.“Effective enforcement therefore requires distinguishing legitimate manufacturing and substantial transformation from pass-through trade and origin shifting,” the report said. Join the Conversation This website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.