MUST READ | White House calls Pune, Gujarat, Chennai ‘ugly sister cities’: What does it mean?

In the report, White House said Gujarat, Chennai and Pune were ‘ugly sister cities’ of Cincinnati, Dayton, and Columbus for manufacturing of pumps and compressors. The term was used to depict pairs of foreign and US production/trade hubs that are connected by the same products. Chinese goods are allegedly routed through these countries before entering the US, and thereby undermining US manufacturing and livelihood.

Navarro said soon after the US imposed tariffs on China in 2018, it began to “develop methods” for transshipping. He called it the “modern form of smuggling”. In the crudest form, China sends its goods to another country, where the label is changed and the goods are sent to the US for lower tariffs. This is usually done in favour of some commerce between China and the third country. The US gets “cheated out of jobs and treasury revenue”, said Navarro.

The Trump aide said that the US has been taking this seriously and has been working on a solution for years.

DON'T MISS | ‘Got firebombed…’: Peter Navarro says he faced the ire of Indians online after his remarks on tariffs, Russian oil

The report, prepared by Navarro, stated that the US is losing some $19 billion to $26 billion in annual tariff revenue to transshipped goods, mostly from China. It stated that for every $1 billion in diverted imports, 6,000 jobs in the US could be displaced, directly and indirectly.