The White House says the United States is losing between $19 billion and $26 billion in tariff revenue each year because trading partners route goods through third countries to evade U.S. duties, a practice regulators call transshipment.
- White House says transshipment costs the U.S. B–B in tariff revenue annually.
- Administration used a central estimate of B in transshipped goods and cited a wider .2B–3B range from various sources.
- CBP is piloting AI tools to detect transshipment and can retroactively apply tariffs when origin fraud is found.
- Sources provided attribute the estimate to the White House; the underlying report and methodology were not included in the evidence packet.
What the administration reported
The estimate appears in a White House report highlighted by administration trade officials. The document and accompanying comments say countries — most prominently China in the administrations account — have responded to U.S. tariffs by sending goods to other nations for repackaging or limited assembly, then exporting those shipments to the United States with altered country-of-origin declarations.
U.S. trade adviser Peter Navarro, speaking on a conference call described in reporting on the report, asserted that this practice has been widespread, saying China routes exports through more than 40 countries. The administration used a central figure of $75 billion in annual transshipped goods to arrive at its revenue-loss estimate, while the report cited a broader range of estimates for the value of transshipped goods each year — roughly $34.2 billion to $303 billion — drawn from government and private-sector sources.
How officials calculated the revenue loss
According to reporting on the White House material, the administration combined an estimated central transshipment figure of $75 billion with tariff schedules and other data to produce a revenue-loss range of $19 billion to $26 billion annually. The report does not appear in the supplied packet, so independent verification of the exact methodology and underlying calculations is not available in the sources provided here.
Administration response and enforcement steps
Officials told reporters that U.S. Customs and Border Protection (CBP) has begun piloting artificial-intelligence tools intended to detect and curb transshipment. The White House also said that when CBP determines an importer falsified origin information, it can retroactively apply tariffs to affected shipments going back about a year.
White House officials framed the issue as both an enforcement gap and a trade policy problem, saying transshipment has allowed foreign manufacturing to continue expanding despite U.S. tariffs aimed at protecting domestic producers.
Context: tariffs, legal challenges and trade flows
The report and the administrations statements come amid ongoing legal and political fights over the presidents tariff agenda. Some of the administrations tariffs have faced successful legal challenges: reporting in the packet notes that the U.S. Supreme Court overturned certain tariff measures earlier in the year. Separate court rulings have tested related authorities. Those developments do not directly confirm the administrations loss estimates but show enforcement and legal limits are active parts of the broader picture.
Reporters also note that the U.S. trade deficit remains substantial: one supplied report cited a year-to-date trade gap of $371 billion, down from a larger imbalance in the same period last year. The packet does not link changes in the overall trade deficit directly to transshipment or to the revenue-loss figures.
Points of corroboration and limits of the public record
Multiple outlets summarized the White Houses claim and relayed Navarros remarks; those stories attribute the $19 billion–$26 billion estimate to the administration rather than to an independent audit. The packet includes a BNN Bloomberg report that describes the administrations central $75 billion transshipment assumption and the broader $34.2 billion–$303 billion range sourced to government and private estimates.
However, the sources provided here do not contain the full White House report or its detailed methodology, nor do they present independent analysis confirming the revenue-loss numbers. The administrations figures therefore reflect its own accounting and assumptions as reported by news outlets; independent verification would require access to the report or supplementary government data not included in the supplied evidence.
Why this matters for U.S. businesses and policy
- Revenue: If the administrations estimate is broadly accurate, tariff evasion would represent a meaningful reduction in Customs duties collected by the federal government.
- Manufacturing and competition: The White House argues transshipment can mask continued foreign manufacturing growth that may compete with U.S. producers, complicating efforts to shield domestic sectors through tariffs.
- Enforcement burdens: Detecting and proving origin fraud consumes CBP resources and may require new technology, legal authorities and international cooperation to be effective.
Unresolved questions
- The packet does not include the underlying White House report or full methodology, so independent assessment of the $19 billion–$26 billion estimate is not possible from these sources alone.
- It remains unclear how much of the transshipment the administration attributes specifically to China versus other countries, beyond the claim that China has routed exports through dozens of jurisdictions.
- The effectiveness, timeline and legal limits of CBPs AI pilot and of retroactive tariffing are not documented in the supplied reporting.
Quick timeline from the supplied reporting
- 2018: The administration’s materials cite 2018 tariffs as an inflection point after which exporters sought third-country routing to avoid duties.
- 2025–2026: The White House produced a report and briefed reporters; some of the administrations tariffs have been struck down by the Supreme Court earlier in the year, while other tariff-related legal fights continue in federal courts.
- Ongoing: CBP has begun prototyping AI tools to detect transshipment and can retroactively tariff shipments when origin fraud is established, according to administration statements relayed in reporting.
Bottom line
The White House is publicly estimating that tariff evasion via transshipment costs U.S. tariff revenues in the tens of billions of dollars annually, citing a central transshipment figure of $75 billion and producing a $19 billion–$26 billion revenue-loss range. Those figures come from administration analysis reported by multiple outlets, but the supplied evidence does not include the underlying report or independent verification of the calculations. Key questions about the scope, methodology and enforcement effectiveness remain open.
“For years, the great transshipment scam has let communist China launder its exports,” Peter Navarro told reporters, according to reporting on the White House briefing.
