The U.S. has again accused India of enabling unfair trade practices by helping China avoid tariffs. A new report from the White House, called “The Great Transhipment Scam,” claims that countries like India, Mexico, and South Korea are involved in routing Chinese goods through their territories to bypass U.S. tariffs.
For decades, the U.S. has relied on China for manufacturing, leading to huge trade deficits. To reduce this, former President Donald Trump imposed high tariffs on Chinese imports starting in 2018. However, China began sending goods through other countries instead, modifying them slightly to appear as if they came from these nations.
The report estimates that $67 billion worth of Chinese goods were rerouted through India and other countries in 2025, costing the U.S. nearly $28 billion in lost tariffs. For example, products like pumps and compressors from China are being processed in India’s Pune-Gujarat-Chennai region before being sent to the U.S.
Despite Trump’s efforts, U.S. imports overall have not decreased; they’ve simply shifted to other countries. This has not reduced America’s reliance on imported goods but has redirected trade flows instead.
India, in particular, has seen a shift in its imports from finished Chinese products to raw materials for local manufacturing. While this could help India become more self-sufficient, it also means that any new U.S. penalties could harm India’s growing economy by making its production costs higher and its exports less competitive globally.