The United States has launched a sweeping investigation into India and over 40 nations, accusing them of facilitating Chinese exporters’ evasion of tariffs through complex transshipment routes. A new AI system is set to bolster customs scrutiny, marking a shift towards data-driven trade policing amid rising global tensions.
The United States has accused India and more than 40 other countries of helping Chinese exporters sidestep American tariffs through a web of third-country routing, in a new trade enforcement push that could tighten scrutiny of global supply chains. The allegations, set out in a report titled “The Great Transshipment Scam” by Peter Navarro, the senior trade adviser to President Donald Trump, say the practice expanded after 2018, when Washington imposed Section 301 tariffs on Chinese goods over unfair trade concerns.
The report says goods worth anywhere from $40 billion to $303 billion a year may be moving through intermediary markets, depending on how the trade is measured. It names major US partners including Mexico, Canada, the European Union, Japan and South Korea, and alleges that Chinese manufacturers and traders move products through countries where they are lightly processed, relabelled, repackaged or invoiced again before reaching the US. India is singled out, with the Pune-Gujarat-Chennai manufacturing corridor identified as a possible conduit for Chinese-origin pumps and compressors.
Washington is also preparing an artificial intelligence system called “Detective Border” to help customs officials flag suspicious shipments. According to the report, the software would draw on shipment histories, routing patterns, product codes, ownership links, declared production capacity and other trade data, using anomaly detection and computer vision to identify cargo that may have been rerouted to evade duties. Officials hope the tool will separate legitimate nearshoring and investment from illegal transshipment, while giving authorities grounds for extra tariffs, penalties or exclusion orders.
The latest move comes alongside a broader escalation in US trade enforcement. Livemint reported that the Trump administration has opened Section 301 investigations into 16 major trading partners, including India, while other reports have said Washington is probing dozens of economies over alleged failures to block goods made with forced labour. Indian companies have also faced separate scrutiny, including a US investigation into Waaree Energies over whether solar products were wrongly labelled as made in India to avoid duties on Chinese-made cells and panels. Together, the measures suggest the US is moving from tariff-setting to data-driven policing of where goods really come from.
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