The White House said in a report on Thursday that more than 40 countries have helped China avoid tariffs by rerouting Chinese goods through third countries, potentially costing the US billions in tariff revenue.

The countries named Canada, India, Mexico, Japan and South Korea evade tens of billions of dollars in tariffs which are tax imposed on imported goods. The spokesperson said: “Any unilateral actions or agreements concerning transshipped goods must not target or harm the interests of third parties," the spokesperson added.”

The report follows a wave of sanctions between the US and China. This comes weeks before Trump is set to meet Chinese leader Xi Jinping in Washington. Between $30 billion and roughly $300 billion in goods have been moved from countries with higher tariffs through those with lower rates.

Chang Po Lo, associate professor of economics at Singapore Management University said: “Washington can argue that China has preserved access to the US market indirectly and that any broader trade settlement must therefore address not only direct Chinese exports but also third-country routing.”

The US warned China against capitalizing on the custom of the practice by moving goods through nations that lower tariffs.

The report underscores key sticking points between both sides as Trump and Xi prepare to meet in the US this September.

Despite official reduction in most tariffs after key talks in May 2025, Washington and Beijing have engaged in retaliatory economic measures including restrictions on humanoid robots shipped to the US and tighter Chinese drone trade controls.

Trump has imposed sweeping tariffs on dozens of US trading partners in April 2025 based on a deep-rooted conviction that tariffs will help elevate American jobs and the economy.

Furthermore, those sanctions have been struck down by the US Supreme court but Trump has repeatedly introduced new ones using substitutive legal frameworks to perpetuate his flagship initiative.