The U.S. government has included Brazil on a list of more than 40 countries classified as high risk for so-called illegal "transshipment," the practice of rerouting goods through third countries to circumvent U.S. tariffs. In a report released Thursday (13), the White House placed Brazil in level 2 of three risk categories, alongside Indonesia, Malaysia, Thailand, Turkey and Vietnam, described as being integrated into production chains and transportation routes linked to China.Level 1 includes "large-scale diversified leaders," such as Canada and the European Union, while level 3 covers smaller economies, such as Cambodia and Laos.
The document also places Brazil, Argentina, Chile, Colombia and Peru in the category of "Latin American corridors," associated with the rerouting of goods, bonded storage and regional assembly.
Peter Navarro, a White House adviser, said the government would begin requiring anti-transshipment clauses in trade agreements. "If you try to transship, you will face penalties, and they will be tough," he said, adding that the strategy is to target countries it has classified as "facilitators" of the practice.
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