US accuses India on Watchlist over Alleged China Tariff-Evasion Network

US accuses India: The US has accused over 40 countries, including India, of being part of a "shadow trans-shipment network" that allegedly helps China avoid high American tariffs.

In a report titled The Great Transhipment Scam, top trade adviser Peter Navarro said the US plans to use artificial intelligence (AI) to spot these shipments and respond.

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US Accuses India: US Targets China’s Multi-Billion-Dollar Tariff Evasion Network

US tariffs on China: Navarro said this practice became more common after 2018, when the Trump administration put Section 301 tariffs on China for what it called unfair trade practices.

The report estimated that illegally transshipped goods are worth between $40 billion and $303 billion each year, depending on how the numbers are calculated.

Navarro, who advises the President on trade and manufacturing, told reporters that the "great transhipment scam" has reportedly let China send its exports through over 40 countries.

China’s Shadow Transhipment Network: Major US Allies Named in China’s 'Shadow Transhipment Network'

US accuses India: Countries in what he called China’s Shadow Transhipment Network include some of America’s largest trading partners, such as Mexico, Canada, the European Union, India, Japan, and South Korea.

The report says China began using other countries for small changes such as processing, relabeling, repackaging, or changing shipping routes.

It makes it appear as though the goods come from another country, even though most of the content is still Chinese.

US India Latest News: How China's Trade Loophole Hurts Manufacturing in Midwest Cities

Navarro said that by avoiding tariffs, China and its state-backed companies can send products to countries with cheap labour, weak customs checks, free trade zones, or special US trade access.

US accuses India: The report says India’s Pune-Gujarat-Chennai region receives pumps and compressors, affecting supply chains in cities such as Cincinnati, Dayton, and Columbus.

Navarro explained that if a Chinese pump leaves Pune as an Indian product, it could mean that the same pump is not being made in those US cities.

US India Latest Update: US Plans AI Border System to Detect Rerouted Goods

The US also plans to use artificial intelligence to detect suspected transhipment. Navarro said the US will use an AI-powered "Detective Border" system to help identify goods entering the US through other countries.

The system is expected to analyse shipment data, routing history, product types, ownership links, production capacity, and other indicators.

Illegal Transhipment: US Customs Aims to Separate Legal Nearshoring from Illegal Pass-Through Trade

According to the report, the goal is to help US Customs and Border Protection distinguish legal nearshoring or foreign investment from illegal pass-through trade, identify risky shipments, and use the findings to stop, tax, or block goods as needed.

About Peter Navarro

Peter Navarro was born on July 15, 1949, in Cambridge, Massachusetts. He is an American economist and a prominent trade adviser to President Donald Trump, known for strongly supporting aggressive tariffs and a tougher U.S. trade policy toward China.

Navarro grew up in a financially difficult household. His father, Al Navarro, was a saxophonist and clarinettist, while his mother, Evelyn Littlejohn, worked at Saks Fifth Avenue in Palm Beach, Florida.

After his parents separated when he was around nine or ten, his mother raised him and his older brother.

The family later moved to Bethesda, Maryland. Navarro worked several jobs as a teenager, including pumping petrol, and has said that his childhood taught him self-reliance.

He attended Tufts University on a full academic scholarship and later joined the Peace Corps, where he spent three years in Thailand.

The experience influenced his worldview and interest in global affairs. He subsequently earned a master's degree in public administration and a doctorate in economics from Harvard University.

Navarro’s Political Journey

Navarro's political journey was unusual. He began as a liberal Democrat with an interest in environmental issues and ran unsuccessfully for office several times, including campaigns for mayor of San Diego in 1992 and Congress in 1996.

During his congressional campaign, he received attention from prominent Democrats, including then-Vice President Al Gore, but failed to win the seat.

His political views eventually shifted toward conservatism. In 2016, Jared Kushner read Navarro's book Death by China and recruited him as a trade adviser to Trump's presidential campaign.

After Trump took office, Navarro became director of the Office of Trade and Manufacturing Policy.

He frequently clashed with administration officials who favoured freer trade and stronger economic ties with China.

Following Trump's defeat in the 2020 election, Navarro supported efforts to challenge the results.

Peter Navarro's Political Comeback and the Rise of Trump's New Tariffs

Navarro was later convicted for refusing to comply with subpoenas from a House committee investigating the January 6 Capitol attack and served four months in prison.

After Trump won the 2024 election, Navarro returned to the administration with greater influence.

He became a key advocate for Trump's sweeping tariff agenda, including the measures announced on April 2, 2025, known as "Liberation Day."

The tariff policy has faced criticism from economists who warn that higher tariffs could increase consumer prices, disrupt supply chains, reduce output and cause job losses.

Despite setbacks, including a temporary tariff suspension and subsequent trade agreements, Navarro has gained greater influence during Trump's second term because of his shared commitment with Trump to an aggressive tariff strategy.

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