White House report estimates $75 billion annual US loss from transshipment fraud

WASHINGTON, United States — WASHINGTON — A White House report estimates that transshipment of goods through more than 40 low-tariff countries and territories costs the United States tens of billions of dollars a year, with a central estimate of roughly $75 billion in annual losses. According to the report, companies and exporters in high-tariff countries, led by China, repackage products, alter documentation and country-of-origin labels, and carry out minimal production steps to avoid US customs duties. Five separate models measuring the scale of the illicit transshipment placed annual losses in a range of $40 billion to $303 billion. Under the central scenario, the report said the activity could result in the loss of about 450,000 jobs and a $113 billion to $150 billion decline in annual gross domestic product, with an additional $19 billion to $26 billion shortfall in federal revenue each year. The report was prepared by the White House to quantify the economic impact of the practice, which involves routing goods through third countries to circumvent US tariffs imposed on higher-tariff origins.