Not aliens or COVID this time – the latest global conspiracy against the USA, according to the Trump administration, is that its allies are trading with China and committing the “great transshipment scam.”
The Great Transshipment Scam
In a 25-page report titled “The Great Transshipment Scam,” released by the White House, the Trump admin names more than 40 countries, including America’s closest allies, as co-conspirators helping evade US tariffs on China. The US loses up to $26 billion annually in tariff revenue due to this scam, according to it.
The report’s “Tier 1” list of offenders includes the European Union, Canada, Japan, South Korea, India, Israel, and Mexico, the pillars of the American-led international order.
According to the report, China provides the “most developed” historical example of evading US sanctions by routing goods through third countries.
Following the imposition of Section 301 tariffs in 2018, the direct U.S. trade deficit with China fell in 2019 and 2020, but the “overall success” of these tariffs “coexists with the abuse” by exporters of the tariff differentials.
Over time, the report warns, these practices contributed to the development of a “global network” of production hubs, logistics platforms, free-trade zones, bonded warehouses, processing corridors, and re-export centers.
According to the report, the participants in this Shadow Transshipment Network and Great Transshipment Scam are being “put on notice.”
The report frames these practices as “smuggling disguised as trade” and “fraud cloaked in paperwork,” suggesting that the very legitimacy of global commerce is now suspect!
Wrecking ball
Deborah Elms, head of trade policy at the Hinrich Foundation, said the current tariff policy was analogous to placing a $10 toll on one road (that being China) and a $3 toll on another. She told Quartz today:
This is a problem that you created, and now you are complaining that the countries are taking advantage of the problem that you created.
In a recent speech, Elms described the current situation as the collapse of eight decades of trade and economic integration, warning that the US administration has stepped into an already struggling system trade environment “with a wrecking ball in one hand.”
Sheadded that Section 301 was originally used by the first Trump administration specifically against China, but now it is being used against everyone for everything.
Section 301 is a US domestic law from 1974 that allows US to unilaterally impose trade restrictions on foreign countries without going through the WTO (World Trade Organisation).
Downplaying humiliation
Commenting on The Great Transshipment Scam report, Amitendu Palit, a trade expert and professor at the National University of Singapore, told Al Jazeera:
The delegitimisation of liberation day tariffs have meant huge loss for the Trump administration: both in terms of the refunds that it has had to pay, as well as in credibility. Therefore, it is seeking out more and more ‘innovative’ forms of weaponising market access.
The Trump administration has had to pay back $100 billion in “Liberation Day” tariff refunds to businesses. Liberation Day was April 2, 2025 when Trump announced broad tariffs to reduce trade deficits and revive its industry.
The BBC reported that since the Supreme Court decision, several major American corporations have already claimed large sums back. Amazon received about $600m in refunds during the second quarter, according to finance chief Brian Olsavsky.
Then Trump also used Section 301 tariffs in July against 60 economies, and is again facing a coalition of 25 US states that has filed a lawsuit challenging the tariffs as unlawful.
The US had designed, nurtured, and supported this global trading system for eight decades. Now that it is not working in the U.S.’s favor, especially with manufacturing in China leaping ahead, we are seeing relentless policies to counter it, some of which are as absurd as aliens.
Featured image via the Canary
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