Tariff Avoidance Surge
- U.S. tariff walls are being bypassed by rerouting goods through Southeast Asia and Mexico. - Transport Topics estimates roughly $300 billion of imports are rerouted annually to avoid U.S. tariffs. - Lawmakers plan tougher policing of transshipment, a shift that could disrupt regional supply chains and reorder trade flows. (ttnews.com) (orfonline.org)
Roughly $300 billion in goods now reaches the United States each year through Southeast Asia and Mexico to avoid tariff bills tied to China. (ttnews.com) Transport Topics, citing Bloomberg analysis of trade flows, reported on April 23 that the rerouted imports are exposing weak spots in U.S. enforcement as Washington prepares for a new round of trade policing. U.S. Trade Representative Jamieson Greer and Mexican Economy Secretary Marcelo Ebrard began bilateral talks in March ahead of the United States-Mexico-Canada Agreement joint review set for July 1. (ttnews.com) (ustr.gov) The basic tactic is transshipment: goods made in one country move through another country before entering the United States, sometimes after only light processing or relabeling. U.S. Customs and Border Protection said on August 15, 2025, that it had uncovered more than $400 million in unpaid duties and identified 89 cases with reasonable suspicion of evasion between January 20 and August 8, 2025. (cbp.gov) China’s direct share of U.S. imports has been falling as those alternate routes expand. Politico, citing Commerce Department data, reported in February that China’s share of the U.S. import market dropped to 9 percent in 2025 from 13.4 percent in 2024. (politico.com) Southeast Asia sits in the middle of that shift because it already hosts factories, ports and supplier networks tied to Chinese manufacturing. The Observer Research Foundation wrote on April 23 that new U.S. tariffs on several Southeast Asian countries, followed by a U.S.-China truce, have tightened the region’s economic squeeze between Washington and Beijing. (orfonline.org) Mexico is central for a different reason: it offers land access to the U.S. market and tariff advantages under North American trade rules. USTR said the March talks with Mexico would examine ways to increase U.S. and Mexican production while limiting “non-market inputs” in North American supply chains. (ustr.gov) Washington has already been moving from broad tariff threats to case-by-case enforcement. A Congressional Research Service report published in January said the July 2026 USMCA joint review is the first test of the pact’s renewal process, giving the United States a formal venue to press Mexico and Canada on compliance and origin rules. (congress.gov) Trade lawyers say the next step could be tougher origin checks, more customs audits and new penalties on goods that only pass through a third country on paper. Paul Weiss wrote in August 2025 that a Trump administration order had added new transshipment tariffs and directed Customs and the Commerce Department to identify facilities and countries used in circumvention schemes. (paulweiss.com) Not all rerouting is illegal, because factories can lawfully shift production and add enough work in a second country to change a product’s origin under trade rules. The fight now is over where that line sits — and whether customs agencies can prove when a shipment crossed it. (cbp.gov) (ttnews.com) The result is a trade map that looks less like a clean break from China than a rerouting through its neighbors and partners. The July USMCA review and the next round of customs cases will show how much of that map Washington is willing, and able, to redraw. (ttnews.com) (ustr.gov)
