What are the most common tariff evasion schemes that CBP is targeting right now?

The article highlights three primary evasion methods: (1) transfer-price manipulation—artificially undervaluing imports between related entities to reduce declared tariff value; (2) misclassification—declaring products under incorrect tariff codes to claim duty exemptions (e.g., Perfectus Aluminum's false "pallet" classification); and (3) false country-of-origin claims—importing goods manufactured in high-duty jurisdictions but declaring them as originating in countries with preferential trade terms. First Brands allegedly cut transfer prices by 32%, while Perfectus Aluminum misclassified extrusions as pallets to evade antidumping duties on over 2.2 million units.

What enforcement tools is CBP using to pursue these cases, and what should importers expect?

CBP is pursuing cases through four channels: False Claims Act civil litigation, whistleblower complaints under the qui tam provisions, the Enforce and Protect Act (EAPA) investigations, and criminal prosecution for intentional fraud. Importers should expect increased document requests, audits of transfer pricing and valuation practices, port-level inspections of high-risk shipments, and potential suspension of entries. The Trump administration's executive order now mandates higher bonding levels for importers and establishes a 50% minimum penalty floor for violations, making non-compliance substantially more expensive.

How will the Trump administration's new customs enforcement order affect my import operations?

The executive order directs DHS and CBP to implement several structural changes: tighter importer bonding requirements (requiring larger security deposits), new mandatory disclosure rules targeting duty evasion schemes, and a 50% minimum penalty floor for violations (replacing case-by-case discretion). These changes are designed to increase friction at import and reduce the financial incentive for evasion. Importers should anticipate longer customs clearance times, higher compliance costs, and increased audit frequency—particularly for companies sourcing from China or other jurisdictions where antidumping/countervailing duties apply.

What should I do if my company is already using transfer pricing or complex sourcing arrangements?

Conduct an immediate internal audit of transfer prices, country-of-origin declarations, and tariff classification justifications, particularly for shipments from 2019 onward. Work with customs brokers and trade counsel to document that all transfer prices reflect arm's-length benchmarks and that product classifications are defensible under HTS rules. Review supplier contracts to ensure documentation requirements are contractually binding. Consider establishing a document retention system and escalation procedure for unusual pricing or classification questions. The penalties for misrepresentation now carry a 50% minimum floor under the new executive order, making preventive compliance critical.

Are there specific product categories or sourcing regions facing the highest enforcement risk?

Yes. The article identifies automotive parts, aluminum extrusions, steel, and rail components as currently high-priority enforcement targets. Sourcing from China, Indonesia, Vietnam, Turkey, and Italy is attracting heightened scrutiny, particularly where antidumping or countervailing duty orders are in place. The Greenbrier rail coupler case also signals that CBP is examining entry procedures for parts that arrive already incorporated into finished goods (such as couplers on railcars), creating potential compliance gaps for companies that have relied on historical customs practices.

Trade Policy & Tariffs

High Impact

Tariff Fraud Crackdown Targets Importers Over Duty Evasion

Jun 4, 2026

Get tomorrow's supply chain signal

Daily supply-chain brief. Free, unsubscribe anytime.

The signal

S. federal government is significantly escalating its enforcement against tariff evasion and customs fraud across multiple supply chains, with recent cases totaling nearly $850 million in claims and settlements. The Department of Justice and Customs and Border Protection are pursuing cases through multiple enforcement channels—False Claims Act lawsuits, whistleblower complaints, and the Enforce and Protect Act—targeting systematic undervaluation of imports, misclassification of goods, and false country-of-origin declarations. These actions signal a structural shift in customs enforcement that will reshape import compliance requirements and increase costs for importers across automotive, metals, and rail sectors.

The First Brands Group case exemplifies the sophistication of modern tariff evasion schemes. After acquiring an auto-parts division in 2020, the company allegedly cut transfer prices declared to CBP by approximately 32% for Chinese imports while raising prices to customers and as manufacturing costs rose globally. This type of transfer-price manipulation—systematically undervaluing imports to reduce tariff obligations—represents a growing enforcement priority. 5 million in duties over a three-year period.

For supply chain professionals, this enforcement wave creates both immediate compliance risks and strategic sourcing challenges. Importers must now expect heightened scrutiny of transfer pricing, country-of-origin documentation, product classification justifications, and declared customs values. The Trump administration's new executive order directing DHS and CBP to tighten importer bonding requirements, establish new disclosure rules, and impose a 50% minimum penalty floor will make compliance failures more costly and operational disruptions more likely. Organizations sourcing from China, Southeast Asia, and other lower-cost regions face elevated audit risk and should urgently review tariff classification practices, supplier documentation systems, and customs broker procedures.

Frequently Asked Questions

What This Means for Your Supply Chain

Simulation Suggestion

this month

What if CBP increases bond requirements by 50% for automotive and metals imports?

Simulate the impact of CBP raising importer bonding requirements by 50% for companies sourcing automotive parts, aluminum extrusions, and steel from China and Southeast Asia. This would increase working capital requirements and cash flow impact, particularly for smaller and mid-market importers.

Run this scenario

Simulation Suggestion

strategic

What if transfer-price audits force 15% cost increases on China-sourced auto parts?

Simulate a scenario where CBP audits force companies to pay retroactive duties due to transfer-price adjustments, resulting in an effective 15% cost increase on China-sourced auto parts. Model the impact on supply costs, supplier relationships, and pricing power in the automotive supply chain.

Run this scenario

Simulation Suggestion

this week

What if tariff audits increase average import clearance time from 2 days to 7 days?

Model the supply chain impact of heightened CBP document requests and valuation audits extending average import clearance times from 2 business days to 7 business days, affecting just-in-time supply chains and increasing inventory carrying costs.

Run this scenario

Go deeper:

Supply Chain Digital Twin: The 2026 Guide

How operators model end-to-end supply chains to see how tariffs, supplier shocks, and regulatory changes ripple across cost, service, risk, and time.

Get the daily supply chain briefing

Top stories, Pulse score, and disruption alerts. No spam. Unsubscribe anytime.

The signal

Frequently Asked Questions

What This Means for Your Supply Chain

Related Articles