Tariff evasion could cost the US $40 billion in revenue, Goldman Sachs warns

"Tariff dodging could deprive the US government of $40 billion a year in revenue, as companies may already be finding ways around President Donald Trump's new import levies this year, wrote Goldman Sachs analysts. The warning comes after Trump's second administration imposed a blanket 10% baseline tariff on all foreign imports, additional varying rates on specific countries, and a series of product-specific duties, including on automobiles."

""The variation in tariff rates across countries provides scope for transshipment of goods through bystander countries with lower tariff rates (and steeper tariffs on transshipped goods may prove hard to implement)," the analysts wrote in a Tuesday note. Foreign exporters and US importers are incentivized to underreport the value of US imports to customs officials, they added. If exporters shift shipments and underreport values in line with historical patterns, Goldman estimates more than $200 billion in annual imports could be affected. That level of dodging would slash tariff revenue by roughly $40 billion versus a full-compliance scenario."

"In particular, foreign companies in Vietnam have simultaneously upped both imports from China and exports to the US since the start of the year. "Furthermore, product-level data point to a higher-than-normal correlation between Vietnamese imports from China and Vietnamese exports to the US, a pattern consistent with rerouting," Goldman's analysts wrote."

Tariff evasion could reduce US government receipts by roughly $40 billion annually as companies reroute shipments and underreport values to avoid higher levies. The US applied a 10% baseline tariff plus additional country- and product-specific duties, creating incentives for transshipment through lower-tariff bystander countries and value underreporting. Goldman Sachs estimates more than $200 billion in annual imports could be affected under historical dodging patterns, producing the $40 billion revenue gap versus full compliance. Trade data show signs of rerouting, notably simultaneous rises in Vietnamese imports from China and Vietnamese exports to the US. The US has deployed measures, including a Trade Fraud Task Force, to curb evasion, and Treasury projections place tariff receipts potentially above $500 billion annually.

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