White House Report Names Canada, Mexico as Key Enablers of Chinese Tariff Evasion

The White House has identified Canada and Mexico as primary enablers of a global network used by China to avoid U.S. tariffs, according to a report released this week. The report from the Office of Trade and Manufacturing Policy, titled "The Great Transshipment Scam," accuses China of routing exports through more than 40 countries to take advantage of lower tariff rates, a practice the administration describes as illegal transshipment.

The report, released on Thursday, August 13, 2026, details what it calls a "shadow transshipment network" that includes major U.S. trading partners such as the European Union, India, Japan, and South Korea. However, it singles out Canada and Mexico as key enablers due to their land borders with the United States and their participation in the Canada-U.S.-Mexico Agreement (CUSMA). The administration argues that China exploits tariff-free provisions under CUSMA by sending goods into Canada or Mexico, which are then shipped into the U.S. at no extra cost.

The report estimates that the U.S. loses between $19 billion and $34 billion in federal tax revenue annually due to this activity. These figures are based on an analysis from AI supply chain firm...