The White House's Three-Tier Framework
On August 13, 2026, the White House released a report on illegal transshipment, the practice of routing goods through third countries to disguise their true origin and dodge higher tariffs. The report groups more than 40 jurisdictions into three tiers based on how they factor into what it calls the "Shadow Transshipment Network." Here's what each tier means, and who's in it.
Important: being named in a tier does not mean goods from that country are presumed to be illegally transshipped. The report itself acknowledges that legitimate manufacturing, investment, and sourcing shifts also occur, and that distinguishing real transformation from pass-through paperwork is the whole point of the exercise.
Diversified Scale Leaders
Large absolute volumes of China-linked goods, moving through diversified industrial bases and major U.S.-bound export platforms, where transshipment risk sits embedded inside otherwise broad, legitimate trade.
Scale Leaders, Significant Economic Integration with China
Meaningful transshipment volumes combined with deeper integration into China-linked supply chains, input sourcing, manufacturing, and logistics.
Small, Opportunistic Chinese Targets
Smaller economies with lower absolute volumes, but specific weak-link advantages: low-cost labor, free zones, port or border access, bonded warehousing, niche assembly capacity, preferential U.S. access, or limited customs enforcement.
Why the tiers exist
The report distinguishes two different questions: how much China-linked trade moves through a country, and how deeply that country's supply chains are wound into Chinese production. Tier 1 countries move large volumes inside otherwise legitimate, diversified trade. Tier 2 countries combine real volume with deeper China integration. Tier 3 countries move less in absolute terms but offer a specific advantage, like cheap labor, a free-trade zone, or port access, that makes them useful for rerouting.
The scale of the problem, in CBP's own numbers
The report cites CBP data comparing two 526-day periods, before and after the current administration took office:
Shipments identified with post-release discrepancies, rising from 93,744 to 323,677.
Associated revenue assessments, growing from $9.6 billion to $25.8 billion.
What's coming next: the "Detective Border"
The report also previews an AI-enabled screening system CBP is developing, referred to as the "Detective Border," intended to compare declared origins, routing histories, and product data against expected patterns at scale. The report frames Executive Order 14411's importer-accountability rules (bonding, ownership disclosure, business affiliations, good standing) as the enforcement mechanism that turns what the AI flags into actual penalties, duty collection, and exclusion. The two pieces are meant to work together, one finds the signal, the other gives CBP the authority to act on it.
Sourcing from a Tier 2 or Tier 3 country?
Our Import Partner Readiness Check includes a direct question on DDP and transshipment risk, alongside seven other EO 14411 factors. It takes about five minutes, with a downloadable record at the end.
Take the Readiness Check