With the second Trump administration came waves of tariff hikes and adjustments that significantly altered the playing field for U.S. importers and importing countries–especially China, which has seen its rates fluctuate as high as 164% in mid-April 2025 and reach an average of 34% in February 2026.
Some importers and suppliers have found ways to push forward with adjusted logistics strategies while others have taken matters into their own hands by breaking the law.
U.S. authorities are cracking down more heavily on cases of tariff and customs fraud in which importing U.S. companies and international suppliers are falsifying information or employing other manipulative tactics in order to reduce or avoid their customs duties.
One common form of tariff and customs evasion involves falsifying the certificate of origin. There have been many cases in which goods made in China were passed off as coming from other Southeast Asian countries (such as Malaysia, Singapore, Thailand, and Vietnam), whether that involved falsifying documentation and labeling or adjusting shipment routes through those countries for the sole purpose of locking in lower tariff rates.
While transshipment in and of itself isn’t against the law (transshipment is the process of transferring goods from one mode of transportation, like a vessel or port, to another), it becomes illegal when it is done for the purpose of avoiding duties, sanctions, or trade restrictions. (The spike in suspected illicit transshipments through Southeast Asia led to the Trump administration enacting a 40% penalty tariff on goods determined to be transshipped to evade applicable duties.)
With federal authorities on high alert with aggressive enforcement in motion, it’s more important than ever for U.S. companies to ensure their importation logistics are compliant with federal law. Even when customs fraud is committed by an international supplier, the receiving U.S. company can still suffer from negative repercussions, whether that involves civil or criminal penalties or seizure of the affected goods.
Learn more about what tariff and customs fraud looks like and how you can protect your business operations from being harmed by it.
Customs fraud that is being used to side-step high tariffs include:
Another common form of customs fraud has been splitting fraud, or the act of splitting shipments for the purpose of customs evasion. This involves dividing larger shipments of imported goods into smaller containers or packages to stay within a duty-free (“de minimis”) threshold. In the United States, that threshold used to be $800 for individual packages, but the U.S. government eliminated the de minimis exemption in efforts to cut down on fraudulent split-shipment schemes.
Acts of tariff and customs fraud can be prosecuted under the False Claims Act, 31 U.S.C. §§ 3729 – 3733, specifically under the “reverse false claims” provision (§§ 3729(a)(1)(G)). Under this provision, offenders can be prosecuted for knowingly taking actions to avoid paying money that is owed to the government (rather than just trying to get a false claim, like an insurance claim, paid by the government).
Many companies are being prosecuted with customs fraud charges following more aggressive inspection and enforcement by U.S. officials as well as through whistleblower claims. The Trump administration has been cracking down on tariff and customs fraud offenses. In April 2025, the Department of Justice launched the Trade Fraud Task Force dedicated to catching parties attempting to evade tariffs and other duties. In July 2026, the task force in conjunction with the Department of Homeland Security surpassed $1 billion in civil and criminal recoveries, penalties, forfeitures, and publicly charged losses, which it achieved in less than one year.
The penalties depend on which code of federal law is used to prosecute the offenses as well as the offender’s level of intent.
An FCA violation can result in civil penalty of $5,000 to $10,000, as well as triple the amount of damages (“treble damages”).
And the primary civil customs fraud statute is 19 U.S.C. § 1592, which prohibits importing merchandise into the United States using materially false statements, omissions, or documents. U.S. Customs and Border Protection may impose the following maximum penalties:
| Violation | Maximum Civil Penalty |
| Fraud (intentional misconduct) | Up to the domestic value of the merchandise |
| Gross negligence | The lesser of the domestic value of the merchandise or four times the unpaid duties, taxes, and fees; if no revenue was lost, up to 40% of the dutiable value |
| Negligence | The lesser of the domestic value of the merchandise or two times the unpaid duties, taxes, and fees; if no revenue was lost, up to 20% of the dutiable value |
For example, if an importer intentionally misrepresents the country of origin to avoid tariffs on a shipment worth $2 million, CBP could seek a civil penalty of up to $2 million, in addition to collecting any unpaid duties.
Prosecutors may also bring forth criminal charges, which can result in imprisonment and criminal fines. Some criminal offenses like smuggling of goods can result in sentences of up to 20 years in prison, and offenders may face multiple charges, which can increase their prison time.
And lastly, companies involved in incidents of customs fraud may be subject to seizure of goods.
If you’re a U.S.-based manufacturer, distributor, retailer or other company that is looking to protect your business operations from getting caught up in claims of tariff and customs fraud, you will need to establish an iron-clad system of internal checks and balances. This will allow you to keep your operations in regulatory and legal compliance and quickly spot any potential red flags.
The easiest way to do this is to partner with a third-party logistics (3PL) partner that can support you in these efforts. The right 3PL can help protect your business operations through:
Porter Logistics, with warehouses in Atlanta and Savannah, Georgia, offers all of the 3PL benefits noted above. With numerous safety and industry certifications and affiliations, Porter Logistics has robust systems and processes in place to help U.S. companies maintain compliance and move goods through their supply chains with ease.
Learn more about how Porter Logistics can support your import logistics!
