The White House has identified South Korea as a country that could be used to circumvent U.S. tariffs on Chinese products. The semiconductor belt in Gyeonggi Province was also mentioned as a potential route for the illegal export of Chinese semiconductors.
On August 13, the White House's Office of Trade and Manufacturing Policy released a report on "massive transshipment fraud," claiming that China is utilizing a "shadow transshipment network" involving over 40 countries to evade high U.S. tariffs.
The report noted that Chinese products could be exported to the U.S. as if they were produced in other countries after undergoing simple assembly, finishing, repackaging, or label changes in a third country.
The White House categorized countries at risk of illegal transshipment into three types. South Korea was included in the first category alongside Japan, the European Union (EU), Canada, India, Mexico, and Taiwan.
The first category consists of countries with significant volumes of China-related goods and developed industrial bases and export networks to the U.S., where the risk of illegal transshipment could be mixed with legitimate trade. However, the White House did not conclude that illegal transshipment has actually occurred in South Korea.
Specifically, the White House identified the Gyeonggi semiconductor belt as a potential distribution route for Chinese integrated circuits. It warned that if Chinese products enter the U.S. through this route, semiconductor production areas in Phoenix, Austin, Portland, and San Jose could face pressure.
Based on government and private data, the White House estimated the potential scale of illegal transshipment to be between $40 billion and $303 billion annually.
If the illegal transshipment scale is assumed to be $75 billion annually, it could reduce U.S. federal tax revenue by $19 billion to $26 billion. Approximately 450,000 jobs could be lost, and the gross domestic product (GDP) could decrease by $113 billion to $150 billion annually.
The White House also plans to enhance enforcement against transshipment using artificial intelligence (AI). It intends to utilize a "Detective Border" system to analyze shipping routes and origin information to identify suspicious transactions.
Peter Navarro, a senior advisor on trade and manufacturing at the White House, stated, "This report is not just targeting China; it serves as a warning against the use of third countries to evade high tariffs." The report may also be used as a reference in future U.S. trade negotiations with various countries.
* This article has been translated by AI.
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