Companies skirt Trump’s tariffs by rerouting goods, underreporting values

Business experts warn that companies might be trying to find ways around Trump’s new trade taxes, potentially costing the United States government up to $40 billion each year in lost revenue.

The concern comes after Trump’s second term brought sweeping changes to import fees. His administration put a 10% basic tax on all goods coming from other countries, added different rates for specific nations, and created special charges for certain products like cars.

Wall Street firm Goldman Sachs released a report Tuesday explaining how businesses might be getting around these new rules. The analysts said the different tax rates between countries create opportunities for companies to move their goods through other nations that have lower fees.

“Companies from other countries and US buyers have reasons to report lower values to customs workers,” the Goldman team explained in their research.

If businesses change their shipping routes and report smaller values like they have done before, Goldman believes more than $200 billion worth of yearly imports could be affected. This level of rule-breaking would cut government income by roughly $40 billion compared to if everyone followed the rules completely.

Last month, Scott Bessent said that money collected from Trump’s trade taxes could bring in over $500 billion each year.

Warning signs are already appearing

Trade numbers are already showing red flags that suggest companies are trying to avoid the new taxes.

Vietnamese companies have increased both their purchases from China and their sales to the US since the beginning of this year. Goldman’s researchers noted that detailed product information shows a stronger connection than usual between what Vietnam buys from China and what it sells to America.

“This pattern matches what we’d expect to see when goods are being rerouted,” the Goldman analysts wrote.

However, they added that some of this activity might be real investment in fresh factories as supply chains adjust to the changed global trade situation.

Some signs show that foreign sellers are reporting lower values for goods coming into the US than what they’re actually worth.

In the past, US records of imports from China were typically about $6 billion higher each month than what China reported sending to the US. This difference was partly due to how statistics are collected. But during the 2018 – 2019 trade dispute, this relationship switched. The gap has grown by another $4 billion a month in 2025. According to a recent report by Cryptopolitan, China’s shipments are surging outside the US.

This happened even though Washington began closing an important loophole this spring. The “de minimis” rule had allowed packages worth less than $800 to enter the US without paying taxes or going through full customs checks.

Ending this rule should have made the reporting differences smaller. But since the gap kept growing, Goldman sees this as proof that companies are reporting false values again.

Government fighting back against tax avoidance

Price data also suggests tax avoidance is happening. Goldman’s research found that costs per item for several types of goods have dropped sharply since April. This includes iron bathtubs from China and gas cooking ranges from Thailand and China-made cast iron bathtubs.

Prices for some US imports have been reduced by amounts too large to be explained by lower manufacturing costs. This suggests international companies may be avoiding taxes by reporting lower US import prices, the analysts explained.

The Trump administration has introduced new steps to stop tax avoidance. These include a 40% charge on goods that are moved through other countries and a special Trade Fraud Task Force.

While Goldman’s estimates of lost revenue are very large, “the impact could be smaller if the recent actions by the Trump administration to” reduce evasion work well, the bank’s analysts noted.

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