Federal prosecutors are gearing up to bring criminal cases against importers that duck U.S. tariffs, a sharp break from the civil‑fine approach that has dominated trade enforcement for decades, the Justice Department said on Wednesday.
What Happened: According to a Bloomberg report, the department is "significant personnel" to a newly retooled Market Integrity and Major Frauds unit so it can zero in on customs fraud, misclassification schemes and other tactics used to avoid duties.
"While some negligent acts or administrative errors may be more appropriately handled civilly, criminal enforcement is appropriate for significant violations of law," said Matthew Galeotti, head of the Criminal Division. "When importers cheat, for example, by undervaluing goods or misstating the country of origin, they avoid the full cost of importing products into the U.S."
Justice officials have already asked U.S. attorneys' offices for shipment records dating back to the Biden years, laying a paper trail for future indictments. Agents from Homeland Security Investigations and Customs and Border Protection are feeding prosecutors leads in sectors ranging from steel and aluminum to textiles and consumer electronics, where duty evasion can deprive the Treasury of "billions" annually.
Why It Matters: The crackdown coincides with Trump's pledge of "very severe" penalties for tariff cheats as his latest round of levies, which include 10% across‑the‑board, 30% on Chinese goods and 50% on all steel and aluminum which takes effect on August 1.
Investigations can take months, but officials say looking at older transactions will help them build cases once the fresh duties are in force. Trade lawyers note the government used the same playbook when it ramped up sanctions enforcement against Russia, dusting off years‑old violations to send a deterrent message.
Analysts warn that elevated duties and a looming criminal overlay could ripple through supply chains, with retailers such as Walmart already flagging tariff pressures on costs and margins. According to another note, uncertainty over potential tariff refunds places a $10 billion question mark on corporate balance sheets and shows why some firms may be tempted to game the system.
Galeotti counters that stiff prosecutions are needed because "trade fraud also deprives taxpayers of billions … and diminishes funds available for important government services."
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