Trump Targets China With 40% Transshipment Tariff

The Trump administration has announced a new 40% tariff on transshipments in a move seemingly targeting China.  

Transshipments are indirect shipments through other nations and often involve the transfer of goods from one vessel to another. China has developed a large global shipping network, so while the tariff on transshipments will affect all counties that engage in the practice, China is likely to be affected more than others. 

The transshipment tariff is “a targeted measure to deal with (reduce) economic dependence on China that has presented significant challenges to American interests and security,” Anthony Kim, a Heritage Foundation research fellow in economic freedom, told The Daily Signal.  

“Needless to say, China has acted unambiguously as an irresponsible global trade polluter and manipulator that [has] threatened and undermined our interests and values worldwide,” Kim said.  

The transshipment tariff will be levied in addition to the tariff rate applied to goods from a specific nation, according to the executive order that President Donald Trump signed Thursday. 

Richard Stern, acting director of The Heritage Foundation’s Center for the Federal Budget, said the original conception for the transshipment tariffs “was designed to focus on preventing China from avoiding tariffs by routing goods through other nations.”  

“However,” Stern warned, “the recent expansion of this transshipment tariff to apply to all goods and all countries significantly weakens its use as a means of stopping Chinese actions and instead could end up being a burden on Americans and our allies as well.”  

Proving a product was transshipped can be difficult, according to Stern, who notes the new tariff could “create a large paperwork burden for U.S. firms. However, this is probably intended as a temporary provision to apply more pressure to intransigent nations to bring them to the negating table to finalize trade deals.” 

Sweeping new tariffs went into effect Friday, but Trump is still involved in negotiations with China over the tariff rate that will be placed on goods coming into the U.S. from China. The clock is ticking as China faces an Aug. 12 deadline to reach a deal with the U.S. 

Trump has repeatedly expressed a desire to reduce U.S. economic dependence on China. Trump announced a 125% tariff on China earlier this year before significantly reducing the tariff in May.

To ensure America is not “exploited by the Chinese Communist Party’s malign economic influence, our nation must reduce U.S. reliance on China’s economy,” Kim said.  

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