Trade Watch: US Flags India Among 40 Nations Over China's Tariff Dodge Tactics

The United States is adding India to its list of countries that are assisting China in avoiding paying tariffs. In a new report written by Peter Navarro, who is the chief trade adviser to President Donald Trump, it is stated that more than 40 countries, including India, Mexico, Canada, the European Union, Japan, and South Korea, are members of China's “Shadow Transshipment Network”. As per this report, which is titled 'The Great Transshipment Scam', China started using countries to send its goods after 2018 when the Trump government imposed tariffs on Chinese goods due to unfair trading practices. It is believed that the total value of goods ranging from 40 billion to 303 billion US dollars is being transshipped to avoid tariffs.

How are Chinese products diverted?

According to the report, Chinese businesses route their products to countries where labor is cheaper, the process of customs clearance is relatively easier, and the ease of trade with the US is relatively high. Then, there are a few altercations done with these products, and new labels may be pasted on them so that people would think that these products were produced somewhere other than in China. The report points out the region of Pune, Gujarat, and Chennai in India as the one receiving pumps and compressors which should have been produced in US cities such as Cincinnati, Dayton, and Columbus.

The Concept of the Detective Border System

To prevent such a situation, the USA plans to employ a computer-based system known as "Detective Border." This system is supposed to analyze documents containing information about shipment routes, their destinations, owners, and others to determine whether certain products are indeed manufactured in the foreign country or if they are merely transiting there without tariffs. Thus, this system will provide the government with an opportunity to deal with products violating the requirements, such as imposing taxes, penalties, and prohibition of shipment. In this way, the USA plans to employ the Detective Border System to prevent such practices from China and other countries in the sphere of tariffs. The Detective Border System is a tool for monitoring China's "Shadow Transshipment Network".