A second wave of tariff dominance has overtaken America’s economy after nearly a century, and the industry must now contend with a new era of compliance.
With the imposition of President Donald Trump’s sweeping International Emergency Economic Powers Act (IEEPA) duties, imports are now facing the highest tariff rates seen since the Great Depression.
The expansive tariff policies have ushered in new mechanisms for enforcement. The Trump administration’s Department of Justice launched a Trade Fraud Task Force last fall—bringing together the collective powers of the Department of Homeland Security, Customs and Border Protection (CBP) and Immigration and Customs Enforcement (ICE)—and has been explicit about its mission to eradicate tariff evasion and trade fraud.
Related Stories
Such illicit activities could include misclassification or undervaluation of goods as well as transshipment. But the government won’t take kindly to innocent mistakes, either.
As such, companies should match Washington’s zeal for rooting out illegal activity with equal enthusiasm for compliance, according to William Jansen, director of customs brokerage services at Seko Logistics.
“Customs is under the gun to catch people—that’s their priority. That’s what they’re being pushed to do by this administration,” he said.
Now that the DOJ has a keen eye trained on enforcement efforts, challenges for importers have the potential to grow significantly, he added. “The difference in dealing with customs and explaining that you acted reasonably is very different than with the DOJ.”
In essence, companies are less likely to find a sympathetic ear if their import activities are investigated by the DOJ, so building a strong foundation for compliance is essential. “Where I would start is: Are my current declarations defensible? Does the documentation line up? Is there a paper trail?” Jansen said. “I think that most companies may underestimate that the paper trail that’s needed.”
The customs broker pointed to a DOJ action taken against Samsung C&T America, Inc., a subsidiary of the Korean conglomerate that sells shoes manufactured in China and Vietnam. The firm was forced to pay $1 million to the U.S. government in a 2023 settlement, admitting that it misclassified certain footwear imports under the wrong Harmonized Tariff Schedule codes. The discrepancy was based on the shoes’ design and construction—details that might be easily confused or overlooked by an untrained eye.
“Explaining how that mistake is made to customs is much easier than the DOJ. Criminal prosecutors are not going to understand how footwear design affects tariffs. The DOJ just sees the dollar signs of what you underpaid, but customs has an understanding of how complicated this stuff can be, especially in apparel imports,” Jansen said.
While importers should be concerned with crossing t’s and dotting i’s when it comes to documentation, they should also be aware of customs rules that could work to their advantage—especially with tariff rates skyrocketing by double digits.
Jansen pointed to the First Sale customs rule that allows importers engaged in transactions that take place in multiple tiers—like a manufacturer selling to a middleman who then sells to the importer—to pay duties on the lower price of the first sale. Successful leverage of the First Sale doctrine can significantly reduce tariff costs, though companies will need to meet the stringent conditions of the rule and provide extensive documentation of all transactions to CBP.
“First Sale is extremely heavily used in the apparel and footwear industry. A U.S. fashion company is rarely doing business directly with a factory. Generally, there is a sale where a middleman or vendor is taking ownership [of the product], and you can declare to customs the price that the vendor is paying to the factory—not the price you’re paying,” Jansen explained. “But you have to have back-to-back documentation; it has to be flawless.”
If documentation is inadequate or incorrect, a company stands to run into major issues, especially in the current enforcement environment.
“Generally speaking, if you can show customs you showed reasonable care, you don’t get penalized. You do have to pay the duty that you underpaid, but you don’t get the slap on the wrist. The DOJ doesn’t operate like that,” Jansen said. Hefty penalties and fines may be the consequence for companies that tangle with the DOJ.
With tariff uncertainty and confusion continuing to escalate, companies have turned increasingly to trade lawyers to make sense of their roles and responsibilities under the new trade policies. They are also looking for recourse should the administration lose its case in the Supreme Court.
“As we prepare for additional tariff changes in 2026, clean customs recordkeeping is going to be absolutely essential to make sure you’re in compliance and can take advantage of any possible refunds,” said Josh Teitelbaum, senior counsel at Akin Gump Strauss Hauer & Feld LLP.
Teitelbaum identified the “top three areas to track” for companies paying tariffs—especially those that hope to receive refunds in the event that the high court invalidates Trump’s IEEPA duties.
One priority is “proactively checking when CBP has liquidated any entries, and tracking when liquidations are upcoming,” he said. Liquidation is the final assessment of the value of duties due on a particular import, and it usually happens about 314 days after the product enters the U.S. Once a tariff is liquidated, the importer has up to 180 days to file a protest, or an appeal of the decision, with CBP.
As such, the lawyer also recommended “tracking the amounts paid under each different tariff, whether that’s related to a reciprocal tariff, a fentanyl tariff, a tariff that would have otherwise been subject to de minimis, or one of the other recently imposed tariffs.” Should Trump’s IEEPA duties be invalidated, companies will be owed refunds on the duties paid under that statute alone. The administration will also likely be turning to other trade laws to levy tariffs in that case, so understanding which tariffs fall under each statute is critical.
Nicole Bivens Collinson, managing principal of international trade and government relations at Sandler, Travis & Rosenberg, P.A., stressed similar priorities.
“For IEEPA tariffs, closely monitor all entries for liquidation, keep a record and be prepared to either file PSCs for non-liquidated entries, protests for liquidated entries or to file in the Court of International Trade after the Supreme Court decision if it requires a legal action to get refunds,” she recommended.
Supply chain traceability for both finished imports and their components and trims, like zippers and buttons, is also more important now than ever. “Keep records on all imports from all countries equivalent to those kept to comply with the Uyghur Forced Labor Prevention Act (UFLPA), which has documentation and tracking and tracing from ‘dirt to shirt,’” she added.
And, as tariff policy continues to evolve, the sourcing landscape continues to shift. While there are few trading partners unencumbered by hefty duty burdens, Collinson said companies should nonetheless remain aware of their options. “Review [your] current sourcing matrix to determine if there are locations that may yield more benefits,” she advised.
