Trade deflection typically occurs when a product is exported to a third country with more favorable trade terms before being re-exported to its final destination. For example, if Country A imposes high tariffs on goods from Country B, but not from Country C, businesses in Country B might export their goods to Country C and then re-export them to Country A to avoid higher tariffs. This can happen due to differences in tariffs, quotas, or other trade restrictions imposed by various countries.