‘Shadow Transhipment Network’: US Says Chinese Goods Under Tariff Rerouted Through India

US President Donald Trump has announced new tariffs of up to 100% on imports of unmanned drones and their components, citing national security concerns and the need to reduce American dependence on foreign suppliers.

According to the White House statement, the new measures include a 100%tariff on certain unmanned aircraft systems, particularly larger drones weighing more than 25 kg and systems equipped with sensitive technologies such as thermal imagers and docking stations. Smaller drones will face a 25%tariff.

‘Shadow Transhipment Network’ Brings India Into Focus

The tariff announcement comes alongside a separate White House report that has described India as a major part of a “shadow transhipment network” allegedly used to reroute Chinese goods into the US market.

According to the report, Chinese exporters increasingly began routing goods through third countries after the Trump administration imposed Section 301 tariffs on selected Chinese products in 2018. The report alleges that goods were shipped through countries where limited assembly, finishing, repackaging, relabelling or documentation changes could make them appear to have a different country of origin.

The report names India, China, Slovakia, Hungary and Azerbaijan in connection with measures aimed at addressing such trade practices.

US Seeks To Boost Domestic Drone Manufacturing

The White House said the new drone tariffs are intended to encourage domestic production of drones and their components, reduce dependence on foreign supply chains and strengthen the US drone manufacturing industry.

China currently has a dominant position in the global drone market, with Chinese manufacturer DJI accounting for more than two-thirds of the global market in recent years, according to studies cited in the report.

Most of the newly announced drone tariffs are expected to take effect from September 3.

China Also Tightens Drone Export Controls

The move comes amid escalating trade and technology tensions between Washington and Beijing.

China recently announced restrictions on drone exports to the US and blacklisted six companies, saying the measures were in response to US trade sanctions related to forced labour and national security concerns.

The latest US action therefore adds drones and related components to the growing list of products caught up in the broader US-China trade dispute.

India-US Trade Talks In Focus

The White House report's reference to India comes as New Delhi and Washington continue efforts to finalise a trade agreement.

The report also refers to a previous 25%additional US levy on India, which was later removed following trade negotiations. A bill mentioned in the report would allow the US executive to take action against countries including India and China, with its sponsors arguing that tariffs should be high enough to discourage purchases of Chinese and Indian goods.

The latest developments place India's trade relationship with the US under renewed scrutiny, particularly as Washington seeks to prevent Chinese products from reaching the American market through third countries.