Illegal trans-shipment could displace 450,000 US jobs, cost $19B-$26B in federal revenue: White House

The estimates are based on a central case of $75 billion in annual illegal transshipment, outlined in a new White House report titled “The Great Trans-shipment Scam”.

The report examines the movement of goods through third countries to evade applicable US tariffs and other trade remedies. It says such practices can include relabelling, repackaging, re-invoicing, minor processing and false country-of-origin claims.

The White House report states that the employment, GDP and federal-revenue figures are model-based estimates rather than observed job losses or measured reductions in GDP. They are intended to illustrate the potential scale of the economic exposure.

White House estimates $75B in annual illegal trans-shipment

The report reviews five estimates of potential illegal transshipment or related trade-transfer exposure. They range from $40 billion to $303 billion, depending on the methodology and definition used.

Goldman Sachs estimates the exposure at $40 billion. The White House Council of Economic Advisers puts its estimate at $34.2 billion to $89.6 billion, with the report using a rounded midpoint of $60 billion.

Exiger estimates $75 billion, while the Department of Commerce’s Office of Trade and Economic Analysis gives a broader $109 billion trade-transfer benchmark. Altana provides a broad upper-bound exposure estimate of $303 billion.

The White House says these estimates are not additive and are not directly comparable, because they use different datasets, methodologies, product screens and definitions.

The administration uses Exiger’s $75 billion estimate as its central case. Exiger directly identified $51.1 billion in potentially illegally transshipped US imports between February 2025 and February 2026, using shipment-flow analysis across 27 countries and priority HS6 product categories.

Its analysis examines product composition, manufacturing capabilities and production processes, using factors including HTS codes, shipment data, satellite imagery, parts, equipment and components to assess whether goods underwent substantial transformation in a third country.

The analysis also uses a 90-day dwell-time threshold as a conservative indicator of pass-through trade rather than genuine manufacturing.

Exiger’s $51.1 billion figure covers selected countries and product categories. Its broader framework indicates that the annual magnitude of tariff avoidance and evasion could approach $100 billion, according to the report. The White House therefore uses $75 billion as a midpoint between Exiger’s directly screened figure and its broader upper-bound assessment.

What is illegal trans-shipment?

The White House report describes illegal trans-shipment as the movement of goods through third countries to evade applicable US tariffs and other trade remedies. The practices it identifies include relabelling, repackaging, re-invoicing, minor processing and false country-of-origin claims.

The report links the expansion of the practice to changes in global trade after the US imposed Section 301 tariffs on Chinese goods in 2018. It says Chinese exporters increasingly routed goods through third countries, where limited assembly, finishing, repackaging, relabelling or documentation changes could create the appearance of a different country of origin.

However, the report states the available data do not establish that all trade that shifted away from China after the 2018 tariffs involved illegal transshipment. Some of the shift, it says, shows legitimate changes in production, investment and sourcing.

The report identifies more than 40 countries associated with elevated illegal-transshipment risk. India is included in its Tier 1 group, alongside Canada, the European Union, Israel, Japan, Mexico, South Korea and Taiwan. The White House describes Tier 1 countries as large trading partners where potential transshipment risk is embedded within broad legitimate trade flows.

$67B in China-linked goods routed through India, Mexico, Vietnam

The Commerce Department’s Office of Trade and Economic Analysis separately estimates that about $67 billion in US-bound goods were transshipped from China through Mexico, India and Vietnam in 2025, under a narrower transaction-level analysis.

The report says this produced an estimated $28 billion in lost tariff revenue. The analysis used transaction-level customs data and flagged goods when an exact-match HS8 product was imported from China and exported to the US from the same local region in the same quarter.

The White House says that its broader $109 billion Commerce figure is a trade-transfer benchmark rather than a direct estimate of illegal transshipment, with some of the replacement trade reflecting legitimate changes in sourcing.

How much tariff revenue could US lose?

The report separately estimates potential tariff-revenue losses by applying hypothetical tariff differentials of 25%, 35% and 45% to the various transshipment estimates.

Under the central $75 billion Exiger estimate, the resulting tariff-revenue loss is:

• $19 billion at a 25% tariff differential;
• $26 billion at a 35% differential; and
• $34 billion at a 45% differential.

The report gives corresponding ranges for its other estimates. For example, the $40 billion Goldman Sachs estimate produces a potential tariff-revenue loss of $10 billion to $18 billion, while the $303 billion Altana estimate produces a range of $76 billion to $136 billion.

The White House says these are alternative estimates and benchmarks and should not be added together. It also says the calculations could understate potential losses for products subject to additional anti-dumping and countervailing duties, which can add substantially to ordinary tariff liabilities.

This tariff-revenue calculation is separate from the $19 billion-$26 billion federal-revenue estimate in the report’s broader economic-loss model.

Why does White House estimate 450,000 jobs could be displaced?

The White House estimates that the $75 billion central case could displace approximately 450,000 US jobs, directly and indirectly.

The calculation uses a trade-deficit employment rule based on analyses by Robert E Scott of the Economic Policy Institute. The report cites different estimates from Scott’s research and adopts a conservative assumption of 6,000 US jobs displaced for every $1 billion increase in the trade deficit associated with illegal transshipment.

Using that assumption, the $75 billion central case produces the estimated 450,000 job figure. Again, the report does not present this as a count of jobs already lost. It is a model-based estimate of potential employment effects.

White House estimates up to $150B GDP loss

The report applies a GDP multiplier of 1.5 to 2.0 to illustrate the potential broader economic effects of the trade deficit associated with illegal transshipment. It estimates that the $75 billion central case could therefore reduce annual US GDP by $113 billion to $150 billion.

The report says this multiplier is a scenario assumption, rather than a direct estimate produced by the US Bureau of Economic Analysis. It then applies a 17% federal-revenue-to-GDP ratio to the estimated GDP loss. Based on that calculation, the White House estimates $19 billion to $26 billion in associated federal revenue losses under the $75 billion central case.