Trump trade team turning to AI to track alleged transshipment tariff dodging for China

The 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.

In 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.

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AI supply chain firm Exiger provided a mid-range estimate of $75 billion in illegally transshipped goods between February 2025 and February 2026, which corresponds to a loss of tariff revenue between US$19 billion and $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, Brazil and Malaysia. Still others are noted for comparative advantages that can be exploited, like the cost of labour, strategic port access, lax customs enforcement or free trade zones.