The US has named India and more than 40 other countries in a report on Chinese goods rerouted to dodge American tariffs.

The United States has accused more than 40 countries, including India, of taking part in what it called a shadow network that helps China get around steep American tariffs. Officials also outlined plans to use artificial intelligence to spot and act on such shipments, PTI reported.

WHAT DOES THE US REPORT SAY?

A report titled ‘The Great Transshipment Scam’ was released by Peter Navarro, the top trade adviser to President Donald Trump. According to PTI, Navarro said the practice grew more common after 2018, when the Trump administration first placed Section 301 tariffs on China over trade practices it considered unfair.

The report put the value of goods rerouted through third countries each year at somewhere between USD 40 billion and USD 303 billion, depending on how the figure is worked out.

WHICH COUNTRIES WERE NAMED?

The list of nations said to make up what Navarro called China’s Shadow Transshipment Network includes several of America’s largest trading partners. These range from Mexico and Canada to the European Union, India, Japan and South Korea.

Navarro was quoted by PTI as saying the arrangement had let Communist China launder its exports through more than 40 countries.

HOW DOES THE REROUTING REPORTEDLY WORK?

Chinese goods were passed through other countries for light processing, relabelling, repackaging, reinvoicing or a change of shipping route. This created the appearance of a different country of origin while the goods remained largely Chinese in content.

Chinese manufacturers and trading firms move goods through places with low labour costs, limited customs oversight, relaxed free-trade zones or favourable access to the US market.

The report singled out India’s Pune-Gujarat-Chennai manufacturing belt, saying it absorbs pumps and compressors that would otherwise affect supply chains in Cincinnati, Dayton and Columbus in the US.

WHAT IS THE ‘DETECTIVE BORDER’ SYSTEM?

Washington plans to bring in an artificial intelligence tool named “Detective Border” to help identify goods that reach the US after passing through third countries.

The system is expected to draw on shipment records, routing history, product classification, ownership links, production capacity, anomaly detection and computer vision, according to the report.

The report as stating that the aim was to help US Customs and Border Protection tell legitimate nearshoring and foreign investment apart from illegal pass-through trade, flag high-risk shipments, and turn findings into enforcement steps such as duty collection, penalties and exclusion orders.