America Targets 40 Countries Over China Tariff Evasion, AI System to Catch Companies Under Scanner

Washington: Now the issue of transshipment has also become heated amid the ongoing tussle over trade between America and China. The Trump administration has accused more than 40 countries including India, of Chinese goods reaching the American market through them and thus trying to avoid the American tariffs imposed on them.

America's chief trade advisor Peter Navarro has indicated strictness in this matter. He said that the US administration will now use artificial intelligence to keep an eye on such activities.

What did America see wrong in transshipment?

According to American reports, after American tariffs were increased on goods coming from China in 2018, some companies adopted the method of sending goods through third countries. The allegation is that Chinese goods were transported to America through another country, so that the high duty imposed on them as a Chinese product could be avoided.

The report claims that business networks of many countries including Mexico, Canada, European Union, India, Japan and South Korea were used for such activities. The US says that in some cases the goods were subjected to minor processing, re-packaging, re-labeling or changes in documents.

What was said in the report about India?

Peter Navarro's report also mentions India's Pune-Gujarat-Chennai industrial region. According to the American claim, pumps and compressors made in China are reaching the American market through this industrial network.

However, the report also admits that it is not easy to determine the exact figure of goods reaching the American market through transshipment. According to different estimates, its annual value ranges from about 40 billion dollars to 303 billion dollars.

How will AI detect suspicious items?

America is now preparing to use an AI system named 'Detective Border' to keep an eye on this entire network. Its job will be to combine different trade data to identify such shipments in which something seems wrong.

The system will analyse a number of indicators such as shipment data, routes of goods, product categories, relationships between companies and their production capacity. Through this, American officials will try to find out whether the actual source of any item is the same as mentioned on paper or not.

What action will be taken against suspicious companies?

The US administration says that if sufficient evidence is found against a company for adopting unfair practices to avoid tariffs, then customs action can be taken against it. Apart from this, additional fees, fines or other sanctions may also be imposed.

In his report 'The Great Transshipment Scam', Navarro has described transshipment as a major challenge for American trade policy. He says that just increasing the tariff is not enough, but it is also necessary to check the actual country of origin of the goods and ensure that the rules are followed.

Why has American pressure on China already increased?

There has been tension between America and China regarding trade for a long time. In 2018, America had imposed tariffs on many Chinese products under Section 301. After this, the tension in trade relations between the two countries increased further.

Now the US administration alleges that trade rules are being taken advantage of by sending goods coming from countries with high tariffs through third countries. Washington is now insisting on closing similar routes.

Can pressure increase on India also?

With India's name appearing in the report, this issue has become important for New Delhi also. However, the allegations made in the US report do not mean that every sugar-related trade from India is part of tariff evasion. The real question will be which companies and which shipments the US authorities consider suspicious and what action they take against them.

At present, America has clearly indicated that it is going to increase strictness on efforts to avoid tariffs through transshipment and for this it will also use AI based surveillance as its weapon.