The United States administration has accused over 40 countries, including Azerbaijan, Georgia, Kazakhstan, and Uzbekistan, of acting as accomplices in helping China evade tariffs to maintain its US-bound exports, according to a White House white paper titled The Great Transshipment Scam. Released in August 2026, the document states that Chinese-led tariff evasion schemes are costing the US Treasury anywhere from “approximately $40 billion to $303 billion annually, depending on the methodology and definition used.”
Tier III Economies and Weak-Link Advantages
The White House trade document divides nations involved in tariff evasion into three distinct categories. According to the report, Azerbaijan, Georgia, Kazakhstan, and Uzbekistan are designated as “Tier III” states. The white paper defines these nations as “smaller economies with lower absolute transshipment volumes but specific weak-link advantages – including low-cost labor, free zones, port or border access, bonded warehousing, niche assembly capacity … or limited customs enforcement.”
The white paper asserts that China’s shadow transshipment network relies on these regional nodes to bypass trade restrictions. “Azerbaijan and Georgia provide rail and dry-port transit, consolidation, and overland-to-maritime connections,” the report states. However, the text does not provide specifics about Kazakhstan’s and Uzbekistan’s role in what it describes as “China’s Shadow Transshipment Network.”
Global Enablers and Affected US Sectors
Beyond Central Asia and the Caucasus, the Office of Trade and Manufacturing Policy identifies much larger economies as key enablers in the transshipment network. According to Al Jazeera’s reporting on the same white paper, major trading partners including the European Union, Mexico, Canada, India, Japan, and South Korea are cited among China’s biggest enablers. Southeast Asian nations such as Indonesia, Thailand, Malaysia, and Cambodia also play significant roles in routing the goods.
The report states that US manufacturing sectors hit hardest by these transshipments include electrical equipment, integrated circuits, aluminium products, and motor components. “Every dollar lost to this Great Transshipment Scam is a dollar stolen from American workers, manufacturers, and taxpayers,” the trade office stated in the document headed by Trump appointee Peter Navarro, as reported by Al Jazeera.
Impact on Diplomacy and the Middle Corridor
Naming Baku, Tbilisi, Astana, and Tashkent complicates diplomatic ties at a time when US relations with all of these nations except Georgia have seen improvements since Donald Trump returned to the presidency in early 2025. Trade enforcement efforts risk creating friction that could hamper broader US geopolitical and economic initiatives in the region.
For instance, a US-brokered peace deal between Armenia and Azerbaijan has yet to be finalized. Furthermore, expanding access to Central Asia’s critical minerals remains a top US diplomatic priority. All four nations serve as key nodes in the Middle Corridor trade network, which is promoted by the US and the European Union to boost trade between Central Asia and the West. The white paper notes that participation in Beijing’s Belt and Road Initiative reinforces commercial dependencies that facilitate these tariff evasion schemes.
AI-Driven Enforcement and “America’s Detective Border”
To combat these practices, the Trump administration’s primary remedy is an AI-driven monitoring system named “America’s Detective Border.” According to the white paper, this system continuously ingests and analyzes global trade data. Algorithms compare declared origins, routing histories, and component content against expected patterns to catch inconsistencies that human agents might miss at scale.
Trade experts suggest the strategy is part of a broader push to weaponize market access. Amitendu Palit, a trade expert and professor at the National University of Singapore, told Al Jazeera that the white paper represents an effort to coerce countries into accepting greater market access for US goods following the legal setbacks surrounding previous tariffs.
Did You Know? Estimates of the annual cost of Chinese-led tariff evasion to the US Treasury range from $40 billion to $303 billion, depending on the economic models and definitions used by trade officials.
Frequently Asked Questions
What is the “Great Transshipment Scam”?
It is a Trump administration white paper describing how China utilizes global trade networks, bonded warehousing, and third-party countries to evade US tariffs and trade restrictions.
Which countries are designated as Tier III states?
Azerbaijan, Georgia, Kazakhstan, and Uzbekistan are designated as Tier III states, defined as smaller economies with lower absolute transshipment volumes and specific weak-link advantages.
How does the US plan to stop tariff evasion?
The administration is deploying an artificial intelligence system called “America’s Detective Border” to analyze global trade data and flag suspicious routing and labeling inconsistencies.
What sectors are most affected by these transshipments?
According to White House reports, electrical equipment, integrated circuits, aluminium products, and motor components are among the hardest-hit US manufacturing sectors.
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