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Our full discussion transcribed after the break:
by Rod D. Martin
August 14, 2026
I appeared on NTD Good Morning with Cary Dunst to discuss how Beijing launders highly-subsidized exports (“dumping”) through as many as 40 countries, and how Trump’s new AI tools will turn China’s cheating into leverage before Xi comes to Washington.
Cary and I discuss:
How China launders exports through third countries to avoid U.S. laws and break U.S. companies
The 500,000 American jobs lost as a result
The $60–$100 billion annual hit to U.S. GDP
How Trump is using AI to crack down before the September summit
It’s a quick 6 minutes that explain this incredibly complex issue. Watch the interview, and pass it along!
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Our Full Discussion:
Cary Dunst: Thanks to Fiona for that report. For analysis of this scheme to evade U.S. tariffs, we welcome Rod D. Martin. He is founder and CEO of Martin Capital.
Good morning, Rod. Thanks for joining us. I want to get your reaction to the numbers in the transshipment-scam report: billions of dollars and nearly half a million jobs.
Rod D. Martin: That’s exactly right. It’s the nearly half a million lost jobs that ought to jump off the page for people. People have treated Chinese transshipment as either a nonissue or something so arcane that only nerds could love it.
No. We’re talking about real moms and dads across America who are in the unemployment line because China cheats. It really is that simple.
And it’s not just China doing the cheating. This transshipment scam has been going on for a long time because, especially since 2018, we have had sizable tariffs on the Chinese for their assorted bad acting.
Earlier, someone on this show said that this is China flooding the United States with cheap goods. I want to amplify that. It isn’t merely that these goods are cheap. They are government-subsidized in a way designed to make them so cheap that they drive Western businesses out of business.
China absolutely destroys industry in the United States and Europe, not through free trade and fair competition but through the kind of cheating only a Communist government can pull off. The Europeans are now facing this in an even bigger way than the United States because they have refused to deal with it as concretely as President Trump has.
The scam, of course, is that they ship to a country with lower tariffs, or perhaps no tariffs, and then pretend those shipments came from that third country.
It might be Vietnam, which is probably the worst offender, or even Mexico, where we actually have a pretty good trade regime. It doesn’t matter. They claim their Chinese product is actually Vietnamese or Mexican to avoid the law.
As a result, they’re lopping between $60 billion and $100 billion off U.S. GDP each year and, as you said, costing around half a million U.S. jobs.
Cary Dunst: It’s truly shocking when you put it into perspective like that. You probably named two of the worst actors, but the White House says the network could run 40 countries deep.
They’ve proposed a technological solution they’ve already developed. It’s called Detective Border. Could you explain your understanding of how it works?
Detective Border: AI to Trace and Stop the Fraud
Rod D. Martin: This is a really cool system and a great application of the stuff we all use every day now. We’re making memes with ChatGPT; the president is making money. That’s exactly what we would expect from Donald Trump.
This AI tool is designed to track the origin, the details, and the deceptions. Where is this product really coming from? If you know that, you can charge the right tariff rate. That rate matters. It isn’t arbitrary, as so many of the president’s critics have said.
I’m a free trader. I want us to have no trade barriers with these countries, and vice versa. I want free and fair trade for the whole world. That would be fantastic.
China doesn’t. China wants to destroy our industry and force us into a position of dependency. We’ve seen that with rare earths, pharmaceuticals, electrical equipment, and countless other things, where the Chinese use unfair trade practices to destroy key sectors of our economy.
This new AI tool is capable of tracking that in a way a bunch of federal bureaucrats would struggle to do. That’s no slap at them, but if you’ve been to the post office, you know these aren’t necessarily rocket scientists to start with.
They need help. There aren’t enough of them for this purpose because the Democrats haven’t had any interest in prioritizing it over the past several decades. We simply don’t have the team we need to sort out all these points of origin.
The AI tool will, and we will actually start to level the playing field.
Cary Dunst: As you point out, perhaps that’s a better use of AI than making memes.
Leverage Before the Trump-Xi Summit
Cary Dunst: I want to get your view on how this transshipment scam, as the White House refers to it, fits into their broader asymmetric war.
We’re just a few weeks away from President Trump’s second meeting this year with Xi, this time in Washington. How does the timing fit together?
Rod D. Martin: It’s highly relevant. All these moves are orchestrated.
Don Ma and I were talking the other day about how this is playing out with reports of Chinese MANPADS being shipped to Iran. That’s a shoulder-fired anti-aircraft missile.
Are they actually shipping them? Maybe, maybe not. It doesn’t matter. It’s positioning against the United States leading into the summit, trying to pressure us not to proceed with the next arms deal with Taiwan.
This is the same thing. This is the White House positioning and saying, “Look, this is all going to go easier, Xi, if you don’t cheat.”
It’s that simple. We’re willing to have a full and fair trade regime with China. We aren’t willing to do it if they’re cheating all the time.
So yes, this sends a big signal. The Chinese know what can be done with AI. They’re using it in surveillance tools against their own people every day. They know we can use this to great effect.
Cary Dunst: Rod D. Martin, thank you so much for sharing your analysis.
Rod D. Martin: Thank you.
