US Accuses Chile and 40-Plus Countries of Aiding Chinese Tariff Evasion

What the White House Transshipment Report Alleges About Chile

The White House report titled 'The Great Transshipment Scam' accuses more than 40 countries, including Chile, of allowing China to illegally evade US tariffs by diverting trade through nations subject to lower duties than those applied to Chinese goods. Chile appears in 'Level 3' of the so-called Shadow Transshipment Network, described as small opportunistic targets for China, alongside Argentina, Colombia, Peru, Panama, Costa Rica and Jordan. The classification is based on characteristics such as low-cost labor, free zones, port or border access and limited customs oversight, rather than on specific illegal shipments.

The Chilean Subsecretariat for International Economic Relations, Subrei, said Chile was not consulted in the investigation and does not share the report's analysis. It added that no evidence has been presented showing such practices in shipments from Chilean territory. Subrei emphasized that Chile administers its foreign trade with strict rules of origin and merchandise verification, complies with its trade agreements, and applies controls consistent with international standards.

The report also identifies higher-level networks: Level 2 includes Brazil, Indonesia, Malaysia, Thailand, Turkey and Vietnam, while Level 1 includes Canada, the European Union, India, Israel, Japan, Mexico, South Korea and Taiwan. Washington says such networks can operate through light assembly, finishing, labeling and component integration, as well as logistics such as diversion, storage, re-invoicing and relabeling. The report estimates annual volumes between $40 billion and $303 billion depending on methodology, using a midpoint of $60 billion. It also announces stronger US enforcement through an 'AI Detective Border' system and warns of sanctions, including loss of US market access, for countries that relabel or divert goods.

Why Chile Pushes Back and Where the Real Trade Risk Sits

Level 3 reads as a vulnerability map, not an evidence file

The report places Chile in the lowest tier not because it proved specific illegal operations, but because the country's features could make it useful for diverting Chinese-linked goods. Subrei stresses that the classification does not attribute illegal transshipment conduct to Chile and identifies no concrete operations. That distinction matters: the report is identifying risk profiles based on gaps or weaknesses, not documenting proven wrongdoing.

Chile's response targets the lack of due process

Subrei's statement is both diplomatic and defensive. It says Chile was never consulted and that no antecedents support the claim, and it contests the report's conclusions. At the same time, it reinforces Chile's existing controls on origin and transit. This is an attempt to keep the dispute in the technical and legal sphere rather than accept a presumption that Chile is part of an illicit network.

The enforcement threat is where the economic risk sits

The report's most consequential part is not the classification itself but the promise of intensified US oversight. The planned AI Detective Border would analyze routes, certificates of origin, corporate ties, production capacity and trade patterns. Even without current evidence of Chilean involvement, that means future shipments may face greater scrutiny. Chile's current 12.5 percent tariff on imports to the US remains unchanged for now, but the threat of punitive tariffs, interdiction or lost market access creates uncertainty for exporters and logistics operators.

What Chilean Exporters and Trade Partners Should Do Now

• Review US-bound shipment documentation for any goods that contain Chinese components or production steps. The report treats substantial Chinese economic origin, control or content as a red flag even when the goods are not declared as Chinese.
• Test compliance against the specific signals the report says AI Detective Border will analyze: route data, certificates of origin, corporate ownership ties, production capacity and trade patterns.
• Prepare for longer customs clearance and possible evidentiary requests for re-invoiced, relabeled or re-packaged cargo moving through Chilean ports or free zones, since the report lists those activities as transshipment tactics.
• Use the unchanged 12.5 percent US tariff on Chilean imports as a window to strengthen origin verification. No immediate tariff change has been announced, but punitive measures remain possible for countries the US judges non-compliant.
• For logistics operators and exporters using Chile as a transit or storage point for goods ultimately headed to the United States, document the commercial rationale and ownership of those flows to avoid being read as part of a Latin America corridor.