New York : A new White House trade report has put manufacturing hubs in Pune, Gujarat and Chennai in an unusual comparison with Cincinnati, Dayton and Columbus in the US. The White House calls such foreign-US pairings “ugly sister cities” in its report, The Great Transshipment Scam: Rise, Scope, and Costs.
It is the White House’s way of describing foreign manufacturing centres that compete with American industrial regions making similar products. But the India reference is part of a much bigger US allegation — that Chinese goods are increasingly being routed through other countries to get around steep American tariffs.
That matters because a product entering the US from China can face a much higher tariff than the same product coming from another country. Washington says this has created an incentive to move goods through countries with lower tariff rates. Trade experts refer to this as tariff arbitrage — taking advantage of the difference between the tariff imposed on a Chinese product and the lower tariff on the same product entering from another country.
The report’s concern is with goods that remain essentially Chinese but are given a new route — and potentially a new country of origin — before reaching the US. It calls the broader shift in trade flows the “Great Reallocation” and the network of countries through which China-linked goods may move the “Shadow Transshipment Network”.
The report describes these countries as “Diversified Scale Leaders” because they have large manufacturing bases, significant trade with China and major exports to the US. It also says the potential transshipment risk in these countries is “embedded within broad legitimate trade flows”. A US Commerce Department analysis cited in the report estimated that about $67 billion of US-bound goods were transshipped from China through Mexico, India and Vietnam in 2025, using a specific product-matching methodology.
The White House report compares foreign manufacturing regions with American industrial areas that make similar products. For India, it identifies Pune, Gujarat and Chennai in connection with the production of pumps and compressors. It compares them with Cincinnati, Dayton and Columbus in the US. The report does not identify a company in any of these Indian locations as having violated US tariff rules.
Washington says Chinese goods routed through third countries can end up competing with American manufacturers that make the same products. If the Chinese origin is hidden and the goods enter the US under a lower-tariff country, American companies can lose business to products that would otherwise have faced higher duties.
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