WASHINGTON (AP) — The Trump White House said in a new report on Thursday that countries are routing their exports through third countries to avoid U.S. tariffs, estimating that there are tax revenue losses of $19 billion to $26 billion annually.The report specifically highlights that China responded to new tariffs in 2018 by sending their goods to other nations ranging from Mexico to Malaysia for packaging and limited assembly — a practice known as transshipping. That pattern made it look like U.S. imports from China had dropped, but enabled Beijing to continue growing its manufacturing sector in ways that could challenge U.S. factories and employment.Peter Navarro, the White House trade adviser, told reporters on a conference call that China is laundering its exports through more than 40 countries, though he claimed that the issues raised in the report were really more about other nations enabling the avoidance of tariffs.
“For years, the great transshipment scam has let communist China launder its exports,” Navarro said.The report comes ahead of a planned September visit by Chinese Leader Xi Jinping, who President Donald Trump described in flattering terms during his own visit to Beijing in May.The Chinese government has described its relationship with the U.S. as one of “strategic stability,” yet its government policies that support exports of manufactured goods have destabilized the auto, metals and electronics sectors in America, Europe, Japan and elsewhere.
