China rejects U.S. transshipment report, opposes drone tariffs
China’s Commerce Ministry has strongly objected to a U.S. report alleging that goods are being transshipped through third countries to evade American tariffs, calling the findings “irresponsible accusations” that disregard facts. In a separate development, Beijing also urged Washington to withdraw newly announced tariffs on drones, saying the measures would harm global supply chains.
At a regular press briefing in Beijing on Thursday, ministry spokesperson He Yadong said China “strongly opposes” the transshipment report, which was released last week. The report estimates that the United States is losing between $19 billion and $26 billion in annual tariff revenue because goods, largely from China, are being routed through intermediary nations to avoid U.S. import duties.
He Yadong said the report “disregards facts and distorts right and wrong,” and appears designed to “suppress and block” Chinese products. He urged the U.S. government to stop what he called irresponsible accusations. The ministry did not provide an alternative estimate of tariff losses, nor did it specifically deny the practice of transshipment.
Transshipment is a commercial practice in which cargo is unloaded from one vessel and loaded onto another in a third country before reaching its final destination. While often used for logistical efficiency, it can also be used to disguise the true origin of goods and avoid import duties. The practice has drawn increasing scrutiny from trade enforcement agencies.
On the drone tariffs, President Donald Trump last week announced duties of up to 100% on imports of unmanned aerial vehicles and their components, citing national security. The White House said the move is intended to reduce U.S. reliance on foreign-made drones, particularly from China, which dominates the sector. Most of the tariffs are scheduled to take effect on September 3.
He Yadong said China “firmly opposes” the tariffs and called on Washington to “immediately withdraw” them. He argued that the U.S. measures “overstretch the concept of national security” and “discriminate against relevant Chinese products.” He also warned that the duties would “disrupt the global drone supply chain and further undermine a fair and competitive market environment.”
The proposed tariffs could affect a wide range of industries that rely on drones for commercial purposes, from agriculture to emergency services. Higher import duties may raise costs for U.S. businesses and consumers, depending on the availability of alternative suppliers.
Chinese drone manufacturer DJI, founded in 2006, controls more than two-thirds of the global market for consumer and commercial drones, according to industry studies. The company has been on a U.S. Commerce Department list of Chinese firms linked to the country's military since 2022, which imposes restrictions on technology access. DJI has consistently denied any military ownership or control, and has challenged its inclusion on the list.
The latest disputes add to a pattern of friction between the world's two largest economies. Both countries have used tariffs and trade restrictions in a wider economic rivalry, affecting sectors ranging from semiconductors to electric vehicles. The drone tariff announcement is the latest in a series of measures that have reshaped trade flows between the two nations.
The developments highlight the ongoing tensions in U.S.-China trade relations, with neither side signalling an immediate resolution. Businesses in both countries are closely watching for further actions, particularly as the drone tariff deadline approaches.
