US Accuses More Than 40 Countries of Helping China Evade Tariffs

The United States has fingered over 40 countries, including Azerbaijan, Georgia, Kazakhstan and Uzbekistan, as alleged accomplices in helping China engage in tariff evasion schemes designed to maintain the country’s US-bound exports, according to a Trump Administration white paper.Titled the Great Transshipment Scam, the White House document assails China for engaging in mercantilist practices that run counter to World Trade Organization principles. It identifies countries that are aiding China’s efforts to evade US trade restrictions, how the Chinese-led networks operate, and outlines countermeasures being taken by the Trump administration.The report divides countries that are playing a role in tariff evasion into three categories. Azerbaijan, Georgia, Kazakhstan and Uzbekistan are designated as “Tier III” states, which are defined as “smaller economies with lower absolute transshipment volumes but specific weak-link advantages – including low-cost labor, free zones, port or border access, bonded warehousing, niche assembly capacity … or limited customs enforcement.”The naming and shaming of Baku, Tbilisi, Astana and Tashkent can potentially complicate diplomatic relations at a time when US ties with all but Georgia have dramatically improved since Trump returned to the presidency in early 2025. Any US effort to tighten tariff enforcement could cause chagrin in foreign capitals that hampers the pursuit of US initiatives in other economic and geopolitical spheres. For example, a US-brokered peace deal between Armenia and Azerbaijan remains to be finalized. In addition, a top US diplomatic and economic priority in Central Asia is expanding access to the region’s abundance of critical minerals.The four states are all nodes in the emerging Middle Corridor trade network, which is promoted by the United States and European Union as a mechanism to boost trade between Central Asia and the West. The Middle Corridor is envisioned as the main avenue for critical minerals exports to the West. The white paper notes the four states are also participants in Beijing’s signature global trade and infrastructure development initiative, the Belt & Road. It adds that the countries’ involvement in tariff evasion “can therefore reinforce commercial dependencies created through the Belt and Road Initiative.”“Azerbaijan and Georgia provide rail and dry-port transit, consolidation, and overland-to-maritime connections,” the report states. It does not provide specifics about Kazakhstan’s and Uzbekistan’s role in what it describes as “China’s Shadow Transshipment Network.”Estimates on the amount that Chinese-led tariff evasion is costing the US Treasury range from “approximately $40 billion to $303 billion annually, depending on the methodology and definition used.”The harm, however, extends far beyond the loss of tariff earnings, the white paper contends. “Tariff revenue is the most obvious loss from illegal transshipment,” the report states. “When China-linked goods enter the U.S. through third countries, they do more than evade duties. They widen the effective trade deficit, displace domestic production, reduce GDP growth, and lower associated federal tax receipts.”The report takes swipes at Trump’s presidential predecessors for allowing China’s entry into the WTO and turning a collective blind eye to Beijing’s unfair trade practices. Tariffs, it goes on to argue, are intended to help level the trade playing field.“Instead of honoring the spirit of its WTO accession commitments, Beijing entrenched a non-market system marked by forced technology transfer, disregard for intellectual property rights, subsidies and industrial policies that create systemic overcapacity and overproduction, deeply embedded market access barriers, lack of regulatory transparency, and refusal to provide reciprocal treatment to U.S. exports,” according to the report.The chief remedy for achieving the “integrity of the U.S. tariff system” is an AI-driven monitoring system that the Trump Administration calls “America’s Detective Border.”“At its core, this Detective Border continuously ingests and analyzes global trade data. Algorithms compare declared origins, routing histories, and component content against expected patterns, revealing inconsistencies that no human could catch at scale,” the white paper explains. By relying on AI, enforcement officials should be more efficient and effective in disrupting tariff evasion, it adds.The Trump Administration acknowledges that cracking down on tariff evasion is tantamount to a game of cat-and-mouse, and that Beijing may find workarounds. “Whether these measures will be sufficient to curb the broader budgetary and economic costs imposed by the Great Transshipment Scam remains to be seen,” the white paper concludes.By EurasianetMore Top Reads From Oilprice.comOil Prices Slide 2% as Markets Brace for Bessent’s ‘Economic D-Day’Iraq Wants to Double Oil Output—and Needs OPEC to Get Out of the WayChina’s Oil Imports Set to Rebound as Refiners Hunt for New Supply