Kathmandu— The Trump administration has accused over 40 countries of participating in a network that helps China evade United States tariffs, resulting in significant losses to American government revenues. The accusation, detailed in a report released Thursday by the Office of Trade and Manufacturing Policy, claims these nations facilitate the flow of Chinese goods into the US with false labeling as part of what officials are calling a “Great Transshipment Scam.” The White House asserts that this practice deprives American workers, manufacturers, and taxpayers of billions of dollars annually and is employing artificial intelligence to strengthen enforcement efforts.

Key Countries Identified In Report

The report specifically names the European Union, Mexico, Canada, India, Japan, and South Korea as among China’s biggest enablers in the alleged scheme. Several Southeast Asian nations, including Indonesia, Thailand, Malaysia, and Cambodia, are also cited for playing “an important role” in the transshipment network. US manufacturing sectors most affected by these practices include electrical equipment, integrated circuits, aluminium products, and motor components.

White House Claims Economic Harm

According to the Office of Trade and Manufacturing Policy, every dollar lost due to this alleged scheme represents a loss for American workers, manufacturers, and taxpayers. Peter Navarro, who heads the office, stated that what once appeared as simple paperwork maneuvers – relabeling, repackaging, and re-invoicing – has become a matter of economic sovereignty and national will. The administration warned that countries facilitating these transshipments are being “put on notice”.

Broader Trade Policy Context

This report comes amidst a series of protectionist trade policies enacted by the Trump administration since January last year, aimed at reshaping global trade dynamics. In a separate action, the administration recently announced tariffs of 10-12.5 percent on imports from countries accused of ignoring forced labor practices. However, these tariffs are facing legal challenges from a coalition of 25 Democratic-led US states, including New York, California and Colorado, who argue they are an attempt to reinstate previously struck down duties.

Expert Analysis Of Motives

Amitendu Palit, a trade expert and professor at the National University of Singapore, suggested that the report is part of a broader effort by the Trump administration to pressure countries into granting greater market access for US goods. He noted that the invalidation of previous tariffs has created financial and credibility losses for the administration, leading it to seek “innovative” ways to weaponize market access through measures like Section 301 tariffs focused on forced labor concerns.

China’s embassy in Washington, DC, has yet to respond to a request for comment. The countries named in the report have also not publicly addressed the allegations at this time.

(With inputs from Al Jazeera)

Originally published on abcnews.com.np.