White House Trade Adviser Peter Navarro Talks Countries Helping China Avoid Tariffs

**SPEAKER_1** (0:02)
Bloomberg Audio Studios, podcasts, radio, news.

**Lisa Abramowicz** (0:07)
Here's the latest, the Trump administration deploying an AI-powered detective border targeting trade partners suspected of helping China avoid tariffs, accusing dozens of countries of participating in a shadow trans-shipment network. This coming ahead of the President Trump's meeting with China's Xi Jinping next month, senior White House adviser Peter Navarro joins us now. Thank you so much for being with us. I would love to start with a question of what motivated you to write the op-ed that you just wrote and just got published now.

**Peter Navarro** (0:39)
Thank you so much, Lisa, and I'm happy to give Bloomberg actually the exclusive on this. This is the report itself, the grand trans-shipment scam. And you can download it on the whitehouse.gov site or read the op-ed in New York Times and you can download it there. My job at the White House going back to the first term and the first day is to protect American workers and businesses from predatory mercantilist practices. And as you know, China leads the list in that category. Back in 2018, Lisa, we put on the historic 301, Section 301 tariffs on China to protect American workers. And it's been a very successful policy. But what happened beginning immediately in 2018 is that China strategically began to develop methods of what's called trans shipping. It's basically a modern form of smuggling.
The crudest form of trans shipping is when China takes a crate of widgets, sends them over to Vietnam or Mexico or Turkey or wherever, and then they swap labels. It comes into America at the lower tariff rate.
China makes out like a bandit. The trans shipping third country makes out because it's facilitating some commerce there. And we get cheated out of jobs and treasury revenue. So I've taken this very seriously over the years. I've been working very closely with customs and border protection. And we're cracking down. And what's really interesting is this new AI detective border that we're developing at Customs and Border Protection.
In the past, it's been basically paperwork and people, and they've been overwhelmed by the flood of tariff evasion in an era of Trump tariffs. And what AI can do with this detective border, and one of the companies we're working with is Exegers. It's a fantastic company, is we can see in real time every boat and every container coming out and every port in the world. And what we can do with AI at the speed of scam is assess with a very high degree of accuracy the probability that that's a transshipment. And then what we can do when the boat gets here, we slap them with a Form 28 and then of likely a Form 29 and collect the revenues that they cheap it is. Peter, we know this is happening because... It's a revolution.

**SPEAKER_4** (3:38)
Because the Chinese trade deficit is falling, but trade flows are staying stable. So it shows that China is doubling down on transshipment. But is there appetite from this administration to go after Beijing for this, given that there is a debate within the Oval Office about wanting to make sure that they keep the truce alive and Xi Jinping is set to visit the president?

**Peter Navarro** (4:00)
You're looking at the wrong target here. What's so amazing about this report and my research is, it's not about going after China. It's about going after the more than 40 countries. And I was surprised by this, frankly. I was surprised how many trans shipping countries. It's going about them. And is there appetite? You damn well there's appetite.
It starts with our great US trade representative, Jameson Greer. What we're doing systematically is negotiating these new deals one by one with countries that want to basically get their tariffs lowered and do that by lowering their own barriers and not cheating. And so every new trade agreement actually has a trans shipment provision, which basically says if that country participates in the grand trans shipment came, if it continues to be part of the shadow trans shipment network, it will pay a very heavy price. And so the crackdown, we understand, like China is just being China, okay?
And shame on America, shame on the Biden regime for not cracking down on this, okay? But the way to crack down on it is not going after China, it's to going after the enablers. And what's so interesting about this whole thing is, I got a doctorate in economics and part of my thing was industrial organization is strategy. I mean, the complexity of the strategies that China is using to evade these tariffs is mind numbing. I mean, literally over 40 countries are involved, big and small. Surprisingly, Mexico is one of the biggest ones. They're able to basically get the USMCA tariffs through deceit. Oh, hold on a second. India is well on the radar screen. You wouldn't think that. And then Southeast Asia is kind of the mother loader, the whole thing, as you might expect. Vietnam, Cambodia, Malaysia, Indonesia and so on.