SINGAPORE – Singapore, along with dozens of other countries, has been named by President Donald Trump’s administration of being at risk of being used by Chinese exporters to avoid US tariffs.
A report issued by the White House on Aug 13 (Washington time), titled “The Great Transshipment Scam”, frames the routing of Chinese goods through an intermediate lower-tariffed country by concealing the true origin.
It also said that the administration will use an AI-powered “Detective Border”, among other initiatives, to help crack down on illegal transshipments.
“The message to the world is simple. The age of untraceable illegal transshipment is over,” the report said.
The report does not say what immediate action will follow. The US already announced in August 2025 an additional 40 per cent tariff specifically on goods determined to have been illegally transshipped to evade duties.
Using estimates from government and private-sector studies, the report estimates that tariff-evading transshipments may have robbed the US of customs revenue in the range of US$40 billion to US$303 billion (S$51 billion to S$388 billion).
“The available data show a substantial reallocation of US import sourcing following the 2018 tariffs. As China’s direct share of US goods imports declined, the combined share supplied by identified transshipment countries increased,” said the White House report.
It said the 40 lower-tariff countries have become the launchpads and hubs of a new evasion architecture, namely “products made largely in China, lightly touched abroad, and exported to America under new identities”.
However, this relationship does not establish that all displaced Chinese trade was illegally transshipped.
“Some of the shift reflects legitimate changes in production, investment, and sourcing. However, the timing, magnitude, and direction of the two trends support further investigation of the extent to which tariffed goods were rerouted through third countries.”
The 40 countries, including Singapore, identified in the report as participants in the “shadow transshipment network”, were grouped into three tiers.
The White House placed Singapore in Tier 3, which the report said consists of “small, opportunistic Chinese targets”.
“These are smaller economies with lower absolute illegal transshipment volumes but specific weak-link advantages – including low-cost labour, free zones, port or border access, bonded warehousing, niche assembly capacity, preferential US access, or limited customs enforcement capacity – that make them attractive opportunistic targets for China-linked rerouting.”
The report also said that China-linked exporters may use these jurisdictions for both limited production activity and logistics side-routing.
The report warned the 40 countries that as their local export sectors and transportation networks become increasingly dependent on Chinese inputs, logistics and capital, “Beijing may gain additional commercial and geopolitical leverage while preserving indirect access to the US market”.
The Straits Times has asked the Ministry of Trade and Industry for comments on the White House report.
However, Singapore has repeatedly stated in the past that it takes trade compliance seriously.
Singapore Customs, in response to media quarries in September 2025, said: “Singapore’s legislative and regulatory framework governing transhipment is consistent with international best practises and rules including those from the World Customs Organisation and seeks to facilitate trade through greater transparency and predictability for businesses.”
The agency added that transhipment in Singapore refers to the movement of goods from their source to their destination via Singapore, involving a change from one conveyance to another.
“Transshipped goods do not originate from Singapore and are not for domestic circulation or storage. Their transhipment through Singapore does not change their country of origin (i.e. they cannot be re-labelled as originating from Singapore).”
Companies transshipping goods through Singapore must fully comply with Singapore’s laws and regulations, said Singapore Customs, adding that the agency works closely with international counterparts to detect and take action against illicit goods imported, exported, or transshipped through Singapore.
The report is part of the Trump administration’s efforts to rebuild President Trump’s tariff regime after it was undermined by a court decision earlier in 2026.
In July, a new 12.5 per cent levy, covering about a third of Singapore’s domestic exports to the US, was imposed after White House alleged Singapore and dozens of other economies have failed to adopt and effectively enforce prohibitions on trade in goods produced with forced labour.
