Indirect China Trade Through Mexico Expanded as U.S. Tariffs Tightened
A growing volume of Chinese goods entered the U.S. through Mexico and other intermediary Asian countries in 2025, allowing importers to avoid an estimated $40 billion in tariffs, according to a report released Thursday by global trade software firm Altana.
Using shipment-level supply chain data and a survey of 91 U.S. trade professionals, including former lawmakers and customs officials, Altana found that some trade flows that previously moved directly from China to the U.S. were rerouted through Mexico to qualify for duty-free treatment under the United States-Mexico-Canada Agreement (USMCA).
The report alleged that many of these shipments failed to meet U.S. customs requirements for “substantial transformation,” making the practice illegal under current trade rules.
“As U.S. tariff laws became more robust, the flow of global trade shifted, with China-to-U.S. trade contracting while intermediary trade routes feeding into the USMCA market expanded,” Altana said.
From January through October 2025, direct China-to-U.S. trade fell 28% year over year to $276.5 billion, according to UN Comtrade data cited in the report. Over the same period, exports from Vietnam to Mexico rose 46% to $18.1 billion, while shipments from Thailand and Malaysia to Mexico increased 19% and 13%, respectively.
Meanwhile, Mexico’s exports to the U.S. climbed 6% to $450.5 billion.
Altana said the surge reflected the use of existing transshipment networks rather than the creation of new manufacturing supply chains.
Transactions moving through what Altana described as “pre-existing transshipment routes” into the USMCA region rose 76% year over year during the first 10 months of 2025.
“The estimated value of shipments showing patterns consistent with illegal transshipment rose sharply throughout 2025, accelerating with each major tariff escalation,” the report said.
