On August 13, 2026, the White House Office of Trade and Manufacturing Policy released a report identifying more than 40 countries it characterizes as presenting an elevated risk of illegal transshipment of Chinese-origin goods into the United States. The report also states that an artificial-intelligence-driven enforcement tool, referred to as “Detective Border,” is under development to support U.S. Customs and Border Protection (CBP) in detecting and interdicting such shipments. The report, The Great Transshipment Scam: Rise, Scope, and Costs, estimates that the value of goods implicated in illegal transshipment ranges from approximately $40 billion to $303 billion annually and builds on customs enforcement authorities established earlier in 2026 under Executive Order 14411.
Executive Order 14411
This initiative by the Office of Trade and Manufacturing Policy is grounded in Executive Order 14411, “Strengthening Customs Enforcement,” signed on June 3, 2026. Among other measures, the order directs the Secretary of Homeland Security to strengthen customs enforcement by: (1) enhancing importer-of-record eligibility, bonding, reporting, and disclosure requirements; (2) restricting foreign importers of record; (3) establishing risk-based compliance standards; (4) increasing penalties for violations; prioritizing enforcement in specified areas; (5) expediting the disposal of noncompliant imports; and (6) increasing enforcement transparency.
The report describes illegal transshipment which includes relabeling, repackaging, re-invoicing, minor processing, false country-of-origin claims, and related documentation practices such that the true origin of the good is obscured.
According to the report, transshipment activity expanded after 2018, when Section 301 tariffs applied to a substantial share of Chinese exports to the United States. In response, some exporters increasingly routed goods through third countries, where limited assembly, finishing, repackaging, relabeling, or documentation changes could make the goods appear to originate elsewhere. The report acknowledges that not all shifts in sourcing and production is transshipment. Some trade reallocation reflects legitimate changes in production, investment, and sourcing. However, it states that the timing, magnitude, and direction of trade shifts toward certain jurisdictions warrant further investigation.
The Three-Tier Country Classification
The identified jurisdictions are divided into three tiers based on trade volume and the degree of integration with China-linked supply chains:
- Tier 1: Large trading partners with diversified industrial bases where transshipment risk may be embedded within broader legitimate trade flows, including Canada, the European Union, India, Israel, Japan, Mexico, South Korea, and Taiwan.
- Tier 2: Countries combining meaningful transshipment volumes with deeper integration into China-linked supply chains and manufacturing platforms, including Brazil, Indonesia, Malaysia, Thailand, Turkey, and Vietnam.
- Tier 3: A larger group of smaller economies described as offering advantages such as low-cost labor, permissive free-zone rules, port access, bonded warehousing, or limited customs enforcement capacity, including Argentina, Azerbaijan, Bangladesh, Cambodia, Chile, Colombia, Costa Rica, the Dominican Republic, Georgia, Jordan, Kazakhstan, Kenya, Laos, Morocco, Myanmar, Oman, Panama, Peru, the Philippines, Singapore, Sri Lanka, Switzerland, the United Arab Emirates, and Uzbekistan.
The AI-Enabled “Detective Border”
To address identified enforcement gaps, the report describes “Detective Border” as an AI-enabled tool intended to integrate shipment data, routing histories, product classifications, ownership relationships, production-capacity indicators, anomaly detection, computer vision, and other analytical methods to support CBP operations. The stated objective is to improve CBP’s ability to distinguish legitimate nearshoring and foreign investment from illegal pass-through trade, identify high-risk shipments, and translate analytical findings into interdiction, duty collection, penalties, and exclusion actions.
What’s next
USTR Ambassador Jamieson Greer has stated that ongoing monitoring and enforcement are intended to ensure the Administration’s trade and manufacturing actions are not undermined. The report frames “Detective Border” and Executive Order 14411 as complementary elements of a broader enforcement strategy that also includes rules-of-origin provisions in Agreements on Reciprocal Trade.
Importers, particularly those sourcing from or routing goods through jurisdictions identified in the report, should anticipate increased CBP scrutiny of country-of-origin claims, more frequent or more detailed documentation requests, and potentially higher penalty exposure as new enforcement tools and EO 14411 measures are implemented.
The Husch Blackwell International Trade and Supply Chain team continues to monitor developments related to the Detective Border initiative and Executive Order 14411 implementation and will provide updates as they become available. If you have questions, please contact your Husch Blackwell attorney.