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Others were found to be more integrated with China-linked supply chains, while a third group had advantages such as preferential US access that make them “attractive opportunistic targets” for rerouting.
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Others were found to be more integrated with China-linked supply chains, while a third group had advantages such as preferential US access that make them “attractive opportunistic targets” for rerouting.
“China began using these third countries for minor processing, relabeling, repackaging, reinvoicing, or routing changes that created the appearance of a new national origin while leaving the underlying Chinese content largely intact,” Navarro said in the report.
He said by routing around the tariffs, China and its state-supported manufacturers and trading firms could push goods into jurisdictions with cheap labour, weak customs oversight, permissive free zones, or preferential US trade access.
The report said India’s Pune–Gujarat–Chennai production belt absorbs pumps and compressors, affecting industrial supply chains in Cincinnati, Dayton, and Columbus.
“A Chinese pump that leaves Pune as Indian is a pump not machined in Cincinnati, Dayton or Columbus,” Navarro said.
The report pegs the annual value of illegally transshipped goods anywhere in the range from approximately USD 40 billion to USD 303 billion, depending on the methodology and definition used.
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