The White House recently issued a report on the transshipment of goods. It focuses on allegations that some countries with lower tariffs seek to evade U.S. tariffs on China by exporting goods that are really produced in China and only slightly modified, if at all, before further export to the U.S.
The report groups more than 40 countries in what it terms a “shadow transshipment network” into three different categories based on how much it estimates the risk of transshipment and the integration of the economy into supply chains involving China. The first tier, mostly advanced countries, are larger economies where transshipment can show up in otherwise “broadly legitimate” trade. The second tier are a few larger developing countries, which have close links with the Chinese economy. The third tier the report terms “small, opportunistic Chinese targets” with “specific weak-link advantages” that increase transshipment risk.
To be clear, transshipment is a risk in some economies. There is also legitimate transshipment (for instance, through normal supply chains and logistics channels) and illegal transshipment (where an exporter files a false certification as to the origin, character, or value of goods). False certifications are punishable by civil and criminal penalties in the U.S. and in most other countries. The World Customs Organization also has international standards on transshipment.
So there are reasons to be vigilant about the risk of illegal transshipment. But to see why the report also misses the mark, consider the example of a country increasingly important to the U.S. with a fast-growing economy. To top it off, the country borders China. It’s Kazakhstan.
First, the report is wrong to call Kazakhstan “small.” It’s 49th in the world by GDP – quite an accomplishment for a country which was formerly part of the Soviet Union.
Second, to term Kazakhstan an “opportunistic Chinese target” is simply not accurate. There is strong trade and investment between China and Kazakhstan, as one would expect from large neighboring countries. And Kazakhstan, particularly at its Khorgos border cooperation center, plays a vital role in the rapidly growing Middle Corridor of trade between China and Europe.
But this is legitimate transshipment of goods, and it is deeply unfair to suggest that Kazakhstan may not be fulfilling its duties. Let’s also not forget why the Middle Corridor is growing: because the West sought another route for Chinese goods after the Russian invasion of Ukraine made shipment through Russia impractical or subject to sanctions.
Kazakhstan is a regional and even global leader in digitalization of both tax and Customs systems. The “smart border” policy is a success in facilitating legal trade while maintaining vigilance and security: in the first half of 2026, about 60% of declarations of goods were automatic, and 80% of transit declarations were completed without the need for Customs control forms. Deepening digital exchange protocols with regional partners including China, Uzbekistan, and Azerbaijan will speed legal trade even further.
Digitalization builds honest systems, free from corruption – and by definition lowering the risk of transshipment. Kazakhstan should be commended for this work, not lumped in with other countries that have not made similar investments in digitizing legitimate trade flows.
Most relevant, however, is the growing importance of U.S.-Kazakhstan trade. The U.S. exports a wide variety of products – turbines, aircraft, prescription drugs, agricultural machinery, and other goods as well as services such as software. Imports are concentrated in commodities including petroleum, chemicals, uranium, silver, ferroalloys, and titanium.
Faced with growing needs to find critical minerals, the U.S. has turned to Kazakhstan and other sources precisely to avoid overdependence on China. The U.S. and Kazakhstan have a critical minerals agreement precisely for this purpose. Again, all this should be commended rather than regarded with suspicion. In fact, imports from Kazakhstan are so vital to the U.S. that most are exempt from U.S. tariffs, because the U.S. recognizes that tariffs would hurt supplies of minerals the country needs.
More to the point, these goods have an exceptionally low risk of transshipment. The U.S. has invested in Kazakhstan’s oil and gas industry since the early 1990s and is well founded there. Oil would not be mislabeled as Chinese – it would make no sense to ship oil through a pipeline and then export via the Caspian Sea when Kazakhstan can fill those pipelines and tankers itself. And no one would send truckloads or boxcars of uranium and ferroalloys from China to Kazakhstan simply to avoid tariffs; that would be uneconomic.
The types of goods about which the report worries are typically finished manufactured goods (for instance, solar panels or auto parts) that might have originated in China and then been only “lightly” processed in another country. Not the kinds of goods that Kazakhstan exports, for which it also receives high-value U.S. goods in a growing trade relationship.
If there is a concern about Chinese investment in Kazakhstan and other countries, then the solution is to increase U.S. investment in natural resources and a wide variety of other economic sectors, from retail to light manufacturing. Ending the annual Jackson-Vanik certification 35 years after the end of the Soviet Union would help grow trade, too – Kazakhstan has free emigration policies and a thriving if small Jewish community. That Amendment has served its purpose and should be ended through the U.S.-Kazakhstan Trade Modernization Act.
The report therefore paints with too broad a brush. That metaphor works in another way as well: a paintbrush is small, portable, and generally inexpensive – the type of good for which a major difference in tariffs has a significant impact on competitiveness. But not uranium or iron alloys or titanium. In addressing serious risks to trade such as transshipment, it’s important to be precise – and to remember which of America’s friends are already taking the actions America seeks.
The views expressed in this article are those of the author and do not necessarily reflect the official policy or position of the publication, its affiliates, or any other organizations mentioned.
