Beijing rejects Washington's 'tariff evasion' accusations

China has rebuffed accusations of a so-called "transshipment scam" made by the United States, with experts and officials emphasizing that normal shifts in global supply chains when companies diversify production and sourcing networks should not be smeared as "tariff evasion".

Their remarks come after a report released earlier this week by the White House's Office of Trade and Manufacturing Policy accused more than 40 economies and trading groups of facilitating "Chinese tariff evasion".

The report, titled "The Great Transshipment Scam", claimed that goods once shipped directly from China to the US were now increasingly routed through other jurisdictions, where minor processing — such as limited assembly, finishing, repackaging, relabeling or paperwork changes — could make them appear to have originated elsewhere.

Huo Jianguo, former head of the Chinese Academy of International Trade and Economic Cooperation, noted that transshipment is a common practice in international trade, as goods may need to pass through third countries for storage, processing, assembly or reexport. The key question, he said, is whether companies falsely declare the place of origin or violate the rules of origin.

Trade flows cannot be interpreted simply by looking at changes in bilateral statistics. A decline in direct Chinese exports to the US and a rise in such exports to Mexico, Canada or Southeast Asia do not automatically mean that Chinese-made goods are being rerouted.

Shi Xiaoli, a professor of international economic law at China University of Political Science and Law in Beijing, said global supply chains are constantly evolving, with companies building factories overseas, sourcing local components and carrying out substantial processing in third countries. Such changes can legitimately result in products gaining third-country origin status, she pointed out.

"Assessments of 'tariff evasion' should rely on verifiable transaction-level evidence, such as specific shipments, companies and origin documents, rather than broad estimates (on which the US report relies) based mainly on changes in trade patterns," Shi added.

In response to the US' latest accusations, a Chinese embassy spokesperson in Washington, DC, said on Thursday that any unilateral actions on transshipped goods must not target any third parties' interests, emphasizing that tariff and trade wars produce no winners, as protectionism harms the common interests of all countries and fails to make the nations that impose them more competitive.

China firmly opposes unilateral tariff measures and the over-stretching of national security justifications to suppress Chinese enterprises, and it rejects any effort to strike a deal at its expense or to use coercive economic measures that disrupt global industrial and supply chains, the spokesperson said.

See Tariffs, page 3