# White House says tariff evasion costs it up to $26 billion a year as Brazil opens a retaliation process

Trade adviser Peter Navarro named more than 40 countries as channels for Chinese goods, and Brazil's government began proceedings under its reciprocity law without committing to counter-tariffs.

- Published: 2026-08-14T05:20:14.277Z
- Canonical: https://polylog.news/2026-08-14/white-house-says-tariff-evasion-costs-it-up-to-26-billion-a
- Publisher: Polylog (Global desk)
- Section: macro
- Sources: [Euronews](https://www.euronews.com/2026/08/14/white-house-says-its-losing-19b-26b-a-year-in-revenue-as-countries-dodge-tariffs), [Al Jazeera](https://www.aljazeera.com/news/2026/8/14/brazil-begins-exploring-retaliatory-options-to-new-us-tariffs)

The White House put a dollar figure on the revenue it says is lost when goods evade its tariffs. Peter Navarro, the trade adviser who has driven the administration's tariff programme, told reporters that China is routing exports through more than 40 countries and that the practice costs the government between $19 billion and $26 billion a year in forgone revenue, [Euronews reported](https://www.euronews.com/2026/08/14/white-house-says-its-losing-19b-26b-a-year-in-revenue-as-countries-dodge-tariffs).

The underlying report from the Office of Trade and Manufacturing Policy relies on an estimate from the supply-chain analytics firm Exiger that roughly $75 billion of goods moved through third countries between February 2025 and February 2026, with the implied revenue loss ranging as high as $34 billion depending on the assumptions used, [according to Fortune](https://fortune.com/2026/08/13/trump-trade-enforcers-deploy-ai-in-tariff-evasion-crackdown/). The report named Mexico, Canada, Indonesia, Thailand, Brazil and Malaysia among the largest routes used, and described plans for US Customs and Border Protection to deploy automated detection systems against re-labelled cargo.

Brazil, one of the countries named, responded differently. [Al Jazeera reported](https://www.aljazeera.com/news/2026/8/14/brazil-begins-exploring-retaliatory-options-to-new-us-tariffs) that Brazil's government has begun exploring retaliatory options against the latest American tariffs without deciding whether to use them. Officials have opened proceedings under the country's economic reciprocity law, which allows the suspension of trade concessions, investment terms and intellectual-property protections, [without yet imposing](https://www.freemalaysiatoday.com/category/business/2026/08/14/brazil-opens-reciprocity-process-against-us-over-tariffs) immediate counter-tariffs that would raise costs for Brazilian importers.

Two mechanisms are at work here. Tariffs make rerouting more profitable, so trade shifts toward whatever legal or semi-legal route costs the least, forcing enforcement to expand into forensic customs work across dozens of jurisdictions. Meanwhile, targeted governments increasingly respond with tools other than tariffs, because they have found that taxing their own importers raises domestic prices first.

## What this means

The revenue estimate matters more as a policy signal than as a fiscal figure. If Washington treats transshipment as the main source of lost revenue, the next round of measures will fall on intermediary countries rather than on China, extending the dispute to Mexico, Vietnam, Thailand and Brazil, none of which started it. Exporters in those economies face documentation and origin-verification costs that raise the price of access to the American market, even when their goods are genuinely local.

## What to watch

- Whether Customs and Border Protection begins issuing origin-fraud penalties against named intermediary countries, which would turn an analytical claim into enforceable liability for importers.
- Whether Brazil moves from opening the reciprocity process to suspending specific concessions, particularly on pharmaceutical or agricultural patents, which would set a template other targeted states can copy.
- Monthly US customs receipts, which show whether the enforcement push actually collects the revenue the report says is missing.