Trump Administration Will Use AI to Combat $60 Billion China Tariff 'Evasion'

Dow Jones
08/13

The White House will use artificial intelligence to help stop what it calls "the great transshipment scam," when goods travel through a third country to evade tariffs.

The Office of Trade and Manufacturing Policy outlined its plans in a 10,000-word report featuring an image of a Trojan Horse -- the wooden horse the Greeks hide in when they sneak into Troy in Homer's Odyssey .

The report said that transshipments became more prevalent after 2018, when the Trump administration imposed Section 301 tariffs on China to counter what it saw as unfair trade practices.

"What began as smallerscale tariff evasion became industrial-scale customs fraud and then a global business model," the OTMP said, adding that other countries were also now using the tactic to dodge high tariffs.

Potentially illegal transshipments may have cost the U.S. about $60 billion in tariff revenue last year, according to a rounded midpoint of estimates by the White House Council of Economic Advisers.

The Trump administration plans to crack down on transshipments by using what it calls an AI-enabled Detective Border that will analyze global trade data.

"Algorithms compare declared origins, routing histories, and component content against expected patterns, revealing inconsistencies that no human could catch at scale," the report said.

 

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