The U.S. Government’s New Trade Enforcement Offensive

Originally published in Dow Jones Risk Journal     

Until recently, many companies viewed customs clearance as a back-office function—handled by customs brokers, reviewed occasionally by accounting, but rarely discussed in boardrooms. While tariffs forced companies to rethink their supply chains, companies remain unprepared for what is coming next. Increased enforcement by the U.S. Customs and Border Protection and the Justice Department, and an administration willing to test underused trade laws to enforce tariffs on companies bringing goods into the U.S., have changed the risk profile for compliance and risk departments.

On June 3, President Trump signed Executive Order 14411, “Strengthening Customs Enforcement,” which directs the CBP to give priority to enforcement against forced labor, misclassification of goods, undervaluation and transshipment (e.g., claiming a good originated in Thailand when it was produced in China). The executive order sets minimum penalties, eliminates mitigation for repeat offenders and directs faster seizure of noncompliant goods. Every company whose products move through U.S. customs now sits inside a materially higher-stakes enforcement environment.

The administration’s reasoning was further explained in the White House Office of Trade and Manufacturing Policy’s “The Great Transshipment Scam” report, which alleges that Chinese exporters route goods through more than 40 third countries—via limited assembly, relabeling, repackaging and false country of origin claims—to disguise Chinese-origin products and secure lower U.S. tariff rates. The August 2026 report estimates that such maneuvers result in between $19 billion and $26 billion in annual lost tariff revenue and previews an AI-driven CBP screening system, “Detective Border,” meant to flag suspect shipments before they clear customs.

Other trending enforcement practices

The recent uptick in enforcement under a federal law known as the Enforce and Protect Act (EAPA) gives CBP and the Justice Department teeth to crack down on violators. In 2026, CBP issued 14 EAPA evasion determinations, uncovering more than $1 billion in duty evasion—a program record, roughly triple the historical annual average. The cases span far more than one industry: solar cells, steel pipe and threaded rod, softwood lumber, freight rail parts, xanthan gum, and consumer goods have all drawn findings through transshipment, undervaluation, misclassification and outright failure to declare antidumping and countervailing duties.

In 2025, the Justice Department also launched a cross-agency Trade Fraud Task Force to enhance efforts to combat and prevent trade fraud that deprives the government of revenue, threatens critical domestic industries, undermines consumer confidence and weakens national security. Using this new muscle, the Justice Department has ramped up its enforcement and investigation of False Claims Act violations, where importers may have made false statements, either intentionally or negligently, regarding, for example, the country of origin of the imported goods. Recently, a Taiwanese LED supplier agreed to pay a $5.15 million settlement to resolve allegations of FCA violations involving country of origin misstatements.

The risk exposure is all around

Companies that never sign as an importer of record aren’t insulated. Detentions, seizures and retroactive duty assessments disrupt delivery schedules, tie up inventory and can trigger downstream contractual disputes with customers, suppliers and lenders. Several major automotive original equipment manufacturers have already faced government investigations and duties and fines for unlawful trade practices in their supply chains, on top of the significant reputational harm caused by such investigations and prosecutions.

Supply chain due diligence

The good news is that you likely have time to address obvious risk areas. It begins with pushing your supply chain to come clean on documentation, such as:

• Country of Origin certificates, or better yet, ask for a binding ruling on Country of Origin and Harmonized Tariff Schedule Codes from the CBP, when in doubt.
• Supply chain mapping from raw materials to final production
• Bills of materials and supply chain tracing key components and raw materials
• Production capacity records that validate manufacturing output
• Periodic, unannounced audits of high-risk suppliers, not just onboarding exercises
• Engage with supply chain professionals and legal counsel
• Audit customs brokers and their work product

Practical risk-mitigation steps

You don’t need to become a customs expert, but risk and compliance departments should demand:

• Proper HTS classification and valuation of goods—are the goods identified correctly, and is the stated transaction value on customs documentation correct?
• Transshipment red flags—third-country rerouting, manufacturing capabilities that don’t add up, pricing that doesn’t match, incomplete supply chain mapping.
• Broker vetting—get to know the people responsible for clearing your goods into the U.S. Review and audit their work from time to time.
• Be ready for a detention, audit or other alleged violation—a strategic plan for addressing all risk areas is essential, and your ability to provide supporting documentation to CBP is essential.

Companies that can take control of their supply chains and plan for the worst-case scenarios with documentation and knowledge will be the most successful.