What is Tariff Evasion and How to Avoid Implication
Jill LaMadeleine • August 15, 2025
tariff evasion is an enforcement priority
The Department of Justice (DOJ) has officially elevated trade and customs fraud—including tariff evasion—to its #2 enforcement priority. This shift is part of a broader strategy under the Trump administration to enforce high tariffs and ensure accurate revenue collection.
The DOJ is targeting misclassification, undervaluation, and false country-of-origin claims. They have mentioned aggressive prosecution, which includes criminal charges and whistleblower incentives. This isn’t a surprise given the spike in rapidly growing tariffs. Even unintentional errors in classification or valuation can trigger heavy penalties. Companies must reassess product classifications, especially with shifting supply chains (e.g., Mexico replacing China).
Some of the lesser penalties include up to 2x the underpaid duties, plus the original amount. Criminal prosecution is possible for importers who have committed intentional fraud or concealment.
What should you do as an importer?
- Conduct a customs risk audit by reviewing your Harmonized Tariff Schedule (HTS) classifications.
- Be sure to be accurate when reporting of the origin and value of an imported product.
- If you have found discrepancies or anomalies, consider filing a voluntary prior disclosures to avoid punitive fines.
- Don’t rely solely on your import broker, remember that importers are ultimately liable.
On July 27th, the Trump Administration announced a deal with the EU imposing tariffs of 15% on most goods entering the US from Europe. As of August 1st, the 15% blanket tariff will cover most US imports. The US will have a 0% tariff for some items including equipment for US manufacturing and generic medicines.
Last week, it was announced that the U.S. had reached a preliminary trade agreement with Vietnam. The agreement involves a 20% tariff on Vietnamese goods.
The American company reached out to ITM for guidance. They were pleased to learn that under U.S. Customs regulations, they could file for duty drawback—a refund of duties paid—on expired and destroyed goods. Within just four months, ITM had successfully obtained the required authorizations and filed all claims related to the product destructions. Due to ITM’s relationship USCBP, and their expertise, over $850,000 in duty refunds was recouped.
On May 28, 2025, a U.S. trade court ruled that President Donald Trump over stepped his authority in imposing the reciprocal tariffs. At that time, the court ordered an immediate block on said tariffs. As of May 29, 2025 a federal appeals court temporarily reinstated the most sweeping of Trump's tariffs. Pausing the lower court’s ruling, The United States Court of Appeals for the Federal Circuit in Washington is going to consider the government's appeal, and has ordered the plaintiffs in the cases to respond by June 5 and the administration by June 9. This is a developing situation and we will do our best to keep the information coming.
This jewelry retailer's duty drawback success story demonstrates the significant impact that a well-managed duty drawback program can have on profitability. By recovering significant funds, the jewelry retailer was able to reinvest in their business, enhance competitiveness, and strengthen their bottom line in a challenging market.
Effective at 12:01 a.m. on April 5, 2025, a 10% baseline tariff on imported goods from most countries, with a few exceptions, will be implemented. This baseline is in addition to regular duties and fees, current IEPPA duties, Section 201 duties, Section 301 duties, and any applicable AD/CVD.
As of 12:01am, March 4, 2025, tariffs of 25% are effective on products from Canada and Mexico and energy products from Canada are subject to a 10% duty. Products that are presently excluded from these tariffs include goods that are for personal use, goods entered under Chapter 98, donations that are imported under HTSUS 9903.01.21and merely information items included under HTSUS 9903.01.22. All other imported items will carry the 25% tariff and no drawback is permitted on these duties.
The upcoming changes to steel and aluminum tariffs will significantly impact the steel and aluminum industries, with numerous provisions to ensure compliance. Importers, exporters, and manufacturers in the steel and aluminum sectors should stay informed about the latest developments and ensure their operations are aligned with these new tariff regulations.
On February 1, 2025, President Trump signed an Executive Order (EO) that imposes an additional 10% ad valorem tariff on most imports from China, which includes products of Hong Kong. U.S. Customs and Border Protection (CBP) quickly followed up with important guidance regarding these changes, particularly impacting the trade community's handling of de minimis shipments from China. Effective February 4, 2025, de minimis shipments from China will no longer be eligible for the administrative exemption from duty under 19 U.S.C. § 1321(a)(2)(C), and will be subject to the new 10% tariffs. Here's everything you need to know about the changes:
The recent guidance from U.S. Customs and Border Protection (CBP) regarding de minimis shipments from China is a significant update. Here's a quick breakdown of the key points in the alert:
