High Tariffs, High Stakes: The Rise in Customs Fraud and Enforcement Risk
As tariffs climb and global trade grows more complex, a growing number of importers are testing the limits, or outright breaking the law, to reduce or avoid duty payments. U.S. enforcement agencies, including Customs and Border Protection (CBP) and the Department of Justice (DOJ), have made it clear that customs fraud will not be tolerated and is a top enforcement priority.
High Tariffs = High Incentive to Cheat
High tariffs create an incentive to cheat. Whether it’s through misclassifying goods, undervaluing imports, or using deceptive transshipment routes, some companies are turning to creative or outright illegal strategies to reduce their tariff liability.
This is not theoretical, we’ve seen it before. During the U.S.–China trade war of 2018–2019, there was a surge in country-of-origin fraud, particularly Chinese goods re-labeled as “Made in Vietnam.” Known as a “country of origin wash,” this practice misleads CBP and avoids duties tied to China.
These incentives have contributed to the emergence of a cottage industry of “tariff reduction” companies that advertise ways to cut import costs. However, many of these so-called strategies amount to evasion, putting importers at serious legal risk.
DOJ Prioritizes Customs Fraud
The Department of Justice is watching closely. In a May 2025 memo, Matthew Galeotti, head of the DOJ’s Criminal Division, named trade and customs fraud as one of the top enforcement priorities in white-collar crime.
The DOJ also expanded its Corporate Whistleblower Awards Pilot Program […]
