Archive · 14 Aug 2026
White House flags India hubs in Chinese tariff-evasion trade report
The US government wrote a big report about how some Chinese-made things are being sent through other countries.
The report is called 'The Great Transshipment Scam: Rise, Scope, and Costs.'
Some companies in India, in places like Pune, Chennai and Gujarat, put Chinese parts into products such as pumps and machines.
Then those products are sent to the US as if they were made only in India.
The US says this is a way to avoid paying extra taxes on Chinese goods.
The report uses the funny name 'ugly sister cities' to describe links between these foreign factories and American factory towns.
The US worries American factories could lose orders and jobs because of this.
India says it is doing real manufacturing and adding value, not just moving Chinese goods.
Other countries like Vietnam, Malaysia, Indonesia and Thailand are also mentioned in the report.
The US wants to use more technology, including artificial intelligence, to catch suspicious shipments at its borders.
A new White House report titled 'The Great Transshipment Scam: Rise, Scope, and Costs' alleges Chinese-made goods are being rerouted through third countries to avoid US tariffs.
The report identifies an industrial corridor spanning Pune, Gujarat and Chennai in India, linked to the production and export of industrial pumps and compressors.
Washington connects the Indian corridor to industrial communities in Cincinnati, Dayton and Columbus, Ohio, using the term 'ugly sister cities'.
Malaysia, Indonesia, Vietnam and Thailand are also cited as hubs in what the report describes as a global transshipment network.
The report estimates tens of billions of dollars in goods could be exposed and hundreds of thousands of US manufacturing jobs could be affected, while India argues its exports reflect legitimate domestic manufacturing.
- Who
- The White House, which published the report, and manufacturing hubs in India (Pune, Gujarat and Chennai) as well as Malaysia, Indonesia, Vietnam and Thailand.
- What
- A White House report alleging that Chinese-origin components are incorporated into products in third countries and exported to the US as locally made goods to evade tariffs.
- When
- The article was published recently; no specific date is given for the report's release.
- Where
- The United States and manufacturing/trading hubs in India, Malaysia (Penang-Kulim), Indonesia, Vietnam and Thailand.
- Why
- To bypass US tariffs on Chinese imports, a practice the White House says pressures American manufacturers through lower orders, reduced production and employment pressure.
US / White House view
India / industry view
Tariff evasion claims
US / White House view
Chinese-origin components are allegedly being incorporated into products in Indian factories and exported to the US as Indian-origin products to bypass tariffs on Chinese imports.
India / industry view
The broader use of imported components does not in itself establish tariff evasion, as modern manufacturing supply chains frequently span several countries before final assembly.
Impact on US manufacturing
US / White House view
Transshipment can affect American factories through lower orders, reduced production and employment pressure, potentially affecting hundreds of thousands of US manufacturing jobs.
India / industry view
Job impact estimates are based on economic modelling rather than a direct count of jobs lost specifically because of transshipment.
Legitimate manufacturing vs circumvention
US / White House view
The US wants to prevent Chinese goods from entering its market through third countries to evade tariffs and is tightening scrutiny of imports.
India / industry view
India's growing manufacturing exports are increasingly supported by domestic production, investment and local supply chains, and legitimate value addition should not automatically be treated as tariff circumvention.
- Report title
- The Great Transshipment Scam: Rise, Scope, and Costs
- India hubs named
- Pune, Gujarat and Chennai
- Products targeted
- Industrial pumps and compressors (HS codes 8413 and 8414)
- US communities linked
- Cincinnati, Dayton and Columbus, Ohio
- Other countries cited
- Malaysia, Indonesia, Vietnam and Thailand
- Estimated value exposed
- Tens of billions of dollars per year
- US jobs potentially affected
- Hundreds of thousands (estimate based on economic modelling)
- Proposed US response
- AI-assisted border screening by US Customs and Border Protection