A recent report from the White House identifies India as a significant player in a “shadow transshipment network.” This network has enabled Chinese products, which are subject to high tariffs in the United States, to enter the American market by rerouting them through third countries with lower tariffs. The findings highlight concerns over trade practices that circumvent U.S. trade regulations.
The bill’s sponsors named India as one of five target economies even as US allies in Europe were left out of its ambit despite similar purchases. The bill permits the executive to act against China , India , Slovakia, Hungary and Azerbaijan. India and the US have been attempting to seal a trade deal. It sorts them into three tiers based on the extent to which they enable the movement of Chinese-origin goods into the US at lower tariff rates.
It was released amid a downturn in India-US relations and six days after the US Senate on Friday last approved , by 86 votes to 11, a bill authorising tariffs of up to 100% on countries, including India, buying Russian oil, gas and other exports. India was slapped with a 25% additional levy in August last year, which has since been removed after trade negotiations. India and other major US trading partners, such as Canada, Japan, the European Union, Israel, and Mexico, have been placed in Tier 1
Its sponsors said the rate should be pitched high enough to deter Chinese and Indian buying. The report identifies roughly 40 countries worldwide playing a key role in enabling this “transhipment network”.
The report calls for firm action against countries enabling the rerouting of tariffed goods to evade US law, including immediate interdiction, penalty tariffs, sanctions, and potential loss of market access.
