14 August 2026
Executive Summary
The White House has put businesses on notice that it intends to intensify scrutiny of goods routed through third countries to avoid US tariffs.
A new White House report estimates that the United States may be losing $19 billion to $26 billion annually in tariff revenue through transshipment, much of it involving Chinese-origin goods that are minimally processed, relabelled or repackaged elsewhere before entering the US. The report identifies around 40 countries as presenting elevated transshipment risk.
US Customs and Border Protection already treats falsification of country of origin through transshipment as a trade violation and issued a specific alert in July warning businesses about illegal transshipment and origin fraud.
The commercial implication is significant: where a product was shipped from is not necessarily where it legally originated.
UK Impact
UK companies could be affected where they:
- Export finished products into the United States.
- Incorporate Chinese components or materials.
- Use contract manufacturers in third countries.
- Buy goods that have been repackaged or lightly processed elsewhere.
- Rely entirely upon supplier declarations of origin.
- Act as intermediaries within multinational supply chains.
A UK company could therefore face customs scrutiny even where it has never purchased anything directly from China.
The risk lies several tiers down the chain.
For example, a component manufactured in China, assembled into a subassembly in another country and incorporated into a UK finished product may still create origin or tariff exposure depending upon the applicable rules.
Global Impact
The White House report says imports from China have fallen sharply while imports from countries including Mexico and Vietnam have increased. The administration argues that some of this shift reflects genuine relocation of production, while some may represent circumvention.
That distinction matters enormously.
Customs authorities are increasingly able to examine:
- Component origin.
- Manufacturing processes.
- Packaging.
- Shipping history.
- Factory capability.
- Supplier relationships.
- Importer records.
CBP says transshipment designed to conceal true origin may result in duty evasion and other violations.
A certificate supplied by a counterparty may therefore be insufficient if the underlying facts do not support it.
Our View
Country-of-origin risk is becoming a due-diligence issue rather than simply a customs-form issue.
Businesses should:
- Identify the true manufacturing location of important components.
- Ask what processing actually takes place in intermediary countries.
- Obtain supporting manufacturing records rather than relying solely upon certificates.
- Include origin warranties within supplier agreements.
- Require suppliers to disclose changes in production location.
- Retain evidence supporting tariff classification and country of origin.
- Review exposure before shipping goods to the US.
- Check whether indemnities cover retrospective customs duties and penalties.
- Investigate sudden changes in supplier routing or invoicing.
- Avoid assuming that “Made in” labels conclusively establish origin for customs purposes.
The key question is:
“Where was this product genuinely transformed into what we are buying?”
Increasingly, customs authorities will want the same answer.
Risk Indicator: HIGH
Disclaimer
The information contained within these Market Alerts is provided for general market awareness and informational purposes only. It does not constitute financial, legal, investment, regulatory or insurance advice. Whilst every effort has been made to ensure accuracy at the time of publication using multiple reputable and independently verified sources, geopolitical events, legislation, regulation and market conditions may change rapidly. Readers should obtain appropriate professional advice before acting upon any information contained herein.
Invictus Risk Solutions LLP – Helping organisations stay ahead of emerging risks through informed insight and independent analysis.