U.S. trade laws only matter when they are enforced

Assistant Attorney General Colin McDonald's August 13 memorandum reinforces the trade and customs fraud priorities established in 2025. It expressly targets illicit transshipment, origin fraud, deliberate undervaluation, sanctions evasion and forced-labor schemes—recognizing the harm to American industry, federal revenue and national security. DOJ has made trade fraud an explicit criminal-enforcement priority, not just a CBP compliance issue.

His October 7 directive translates those priorities into prosecutorial instructions: investigate all responsible participants, consider additional charges, prioritize early asset seizures, and pursue forfeiture and civil remedies as appropriate. Their effectiveness will depend on the prosecutorial expertise, investigative resources and interagency coordination needed to execute them.

The test remains execution. Our Trade Fraud Case Tracker shows an average of 8.3 years from first violation to resolution across 34 cases closed between 2023 and 2026. Those outcomes matter, but American businesses confronting trade fraud today need an order-of-magnitude increase in both the number of cases pursued and the speed at which they are resolved, with consequences that change the incentives to commit fraud.

CBP issued affirmative EAPA determinations involving Chinese products entering through Mexico and Thailand. It found that XCMG North America evaded duties on mobile access equipment shipped through Mexico, with likely combined duties of 69.31% on affected entries. In a separate case, CBP found evasion involving Chinese seamless steel pipe routed through Thailand. Neither announcement established how much money has been recovered.

These are meaningful enforcement findings, but they do not themselves establish criminal fraud or guarantee collection. CBP can take steps to assess and secure duties; contested collection can require DOJ civil litigation, while criminal charges follow a separate investigation.

Our EAPA (AD/CVD) Enforcement Tool Kit explains the process and where it can stall. The next test is whether DOJ has the prosecutors and specialized trade-fraud expertise to turn findings into financial consequences and, where warranted, criminal accountability.

A 2021 EAPA allegation (opens in a new tab) by the American Kitchen Cabinets Alliance led CBP to find in 2022 that Chinese cabinets were transshipped through Malaysia to evade duties. DOJ alleges the scheme extended to quartz and ceramic tile, involving undervaluation and false descriptions. After CBP began investigating, shell importers allegedly allowed the operation to continue.

The government did not stop at CBP's finding. Criminal charges (opens in a new tab) followed in December 2025 against Uni-Tile, its CEO and others. When CBP's payment demands went unmet, DOJ pursued civil action (opens in a new tab), seeking $67.9 million in unpaid duties and $222.5 million in fraud penalties. Both cases remain unresolved; the allegations have not been proven.

This coordinated civil and criminal response deserves recognition and should be replicated. Yet our KCMA case study shows that favorable EAPA findings often fail to deliver results. Replication requires DOJ capacity and specialized trade-fraud expertise in U.S. Attorneys' Offices and Main Justice. Success means collecting duties, imposing penalties exceeding the gains from fraud, and holding culpable individuals accountable. A settlement leaving the financial rewards of misconduct intact would fail to deter.

On October 2, EnforcementNOW urged House leadership to continue the bipartisan Select Committee on China in the 120th Congress. Our supporters span approximately 140 congressional districts and multiple industries confronting trade crime firsthand.

The Committee recognized that individual violations reflected systemic enforcement failures, not isolated incidents. It challenged CBP, HSI and DOJ on why unlawful practices persisted despite credible evidence, questioned the accountability of major U.S. purchasers, and helped advance the bipartisan PAIL Act, which passed the House on August 31.

The Committee’s value extends beyond trade enforcement. Its work brings industry experience into congressional oversight of China’s economic, technological and national-security challenges. Preserving that capability is important to understanding and addressing the broader competition with China.

For the second consecutive Congress, the bipartisan Trade Crimes Act (PAIL) passed the House by voice vote on August 31. The previous bill stalled in the Senate in 2024; the Senate has the opportunity to finish the job.

The legislation would give DOJ’s Trade Fraud Task Force and new Global Trade & Commerce Enforcement Section a statutory foundation, requiring dedicated prosecutorial capacity, specialized training, interagency coordination and annual reporting to Congress. Effective enforcement requires expertise and continuity, not initiatives dependent on individual officials or administrations.

EnforcementNOW congratulates Rep. Ashley Hinson and Select Committee leaders John Moolenaar and Raja Krishnamoorthi for their bipartisan leadership. The Senate should pass this legislation and make trade-crime enforcement an enduring federal responsibility, with consequences strong enough to deter.

On September 18, CBP began stronger verification of importer identities under Executive Order 14411. Where the information identifying an importer is inaccurate or incomplete, CBP can void its importer-of-record number, preventing further entries under that number until the problem is resolved.

This addresses a longstanding vulnerability: shell companies and disposable importer identities can be used to evade duties and then disappear when payment is demanded. Better identity checks make it harder to continue importing behind unreliable records and help identify who is legally responsible.

But blocking future shipments is not the same as collecting unpaid duties from earlier imports. Enforcement will be measured by both: preventing repeat abuse and pursuing the money already owed.

The White House's August 13 report, The Great Transshipment Scam (opens in a new tab), assembles five estimates ranging from $40 billion to $303 billion annually. Their methods and definitions differ, and none establishes a precise amount of proven fraud. Trade crime is designed to escape detection. Its exact scale cannot be known; its order of magnitude is difficult to dismiss.

The harm extends well beyond lost customs revenue. Unlawful advantages can take sales, investment and jobs from American manufacturers. Yet trade fraud is still too often treated as a technical white-collar offense, rather than a threat to the workers and industries competing against it.

The administration has elevated the issue, but EnforcementNOW believes its economic consequences still receive too little attention. The challenge is to turn recognition into timely investigations, actual collections and deterrence.

Bloomberg reported that U.S. customs officials made unannounced inspections of China-linked factories in Vietnam, checking raw materials, records and manufacturing processes. Sources said the inspections had not yet uncovered significant evidence of illegal transshipment. That is a limited finding, not a conclusion about the wider problem.

Subsequent Straits Times reporting (opens in a new tab) documented the scale of Chinese materials, machinery and investment feeding Vietnamese factories, including fast-growing cross-border logistics. This is not proof of origin fraud: goods genuinely manufactured in Vietnam can lawfully incorporate Chinese inputs.

The question is whether CBP's inspections examined enough of the production process and supply chain, under product-specific origin rules, to detect false claims where they occur. What was examined, and how representative were the factories visited?

In July, DOJ and DHS reported more than $1 billion in recoveries, penalties, forfeitures and charged losses since establishing their Trade Fraud Task Force in August 2025. These measures are not interchangeable, and the combined figure does not mean $1 billion was collected.

DOJ also established a Global Trade & Commerce Enforcement Section, brought together 35 U.S. Attorneys' Offices and issued a joint enforcement guide. Dedicated expertise and national coordination deserve recognition. Closing older cases and recovering what is owed are necessary, but stopping current violations before they destroy legitimate businesses is even more important.

Our Case Tracker shows an average 8.3 years from first violation to resolution across 34 closed cases with available information. That is not a statistic about this DOJ announcement; it illustrates the larger cost of delay. Effective enforcement must be measured by how quickly misconduct stops, the sums actually recovered and the consequences imposed.

EnforcementNOW partnered with American Moment (opens in a new tab) to develop a trade crime study guide for current and future government staffers and policymakers. These are the people who help draft legislation, oversee federal agencies and advise elected officials. Without that understanding, Congress can pass legislation and fund enforcement without addressing the failures that allow trade crime to persist.

Drawing on real enforcement cases and firsthand industry experience, the guide explains transshipment, undervaluation, misclassification and smuggling. It examines weak import verification, divided agency responsibilities and delays in holding violators accountable.

Trade enforcement is a multigenerational challenge. Urgent action is essential, but lasting progress also depends on developing the knowledge and commitment to sustain effective enforcement across future administrations.

On June 3, President Trump signed an executive order directing broad reforms to customs enforcement: stronger importer and broker vetting, greater disclosure of supply chains and foreign export records, higher bond requirements and more audits. The order also directs CBP and DOJ to prioritize transshipment, undervaluation, misclassification and forced-labor violations.

It calls for tougher penalties, including a minimum 50% penalty floor absent specified exceptional circumstances, faster handling of seized goods and annual enforcement transparency reports. DHS must also recommend legislative reforms.

An executive order alone does not change enforcement. DHS, CBP and DOJ must act on its directives, and Congress must follow through where legislation or funding is required.

The FY2026 appropriations agreement (opens in a new tab) set aside at least $2 million for DOJ's Trade Fraud Task Force. For FY2027, House appropriators (opens in a new tab) have recommended at least $20 million—a tenfold increase and a welcome recognition of the seriousness of trade crime. The larger amount is a committee proposal, not enacted funding.

Even $20 million is modest against the scale of unpaid duties and damage to lawful American businesses. But funding is only a start. DOJ must develop specialized prosecutors, investigative methods and sustained support for U.S. Attorneys' Offices, rather than treating customs fraud as occasional general fraud work.

Congress should back this commitment with the Trade Crimes Act (opens in a new tab), which would establish a durable mandate. The test will be cases pursued, violations stopped and money actually recovered—not the amount appropriated.

DOJ announced (opens in a new tab) that Perfectus Aluminum and affiliated companies agreed to pay $549.5 million to resolve civil allegations of evading duties on Chinese aluminum extrusions imported from 2011 to 2014. Corporate defendants were convicted in a related criminal case in 2021. This is significant enforcement, supported by investigators, prosecutors and whistleblowers—but an agreement to pay is not proof of collection.

The timeline is troubling. Years passed between the imports, the criminal case and the civil settlement. During that period, lawful competitors had to contend with prices shaped by duties allegedly avoided. Our Case Tracker's Key Insights show an 8.3-year average from first violation to resolution among closed cases with sufficient data.

The question is not whether a settlement is acceptable. It is whether the government recovers the money, imposes consequences greater than the benefit of misconduct, and can deliver comparable results before the competitive damage becomes permanent.

Boise Cascade pleaded guilty (opens in a new tab) on April 27 to a felony Lacey Act violation and was ordered to pay a $6.382 million fine—twice its gross profit from illegally sourced plywood. The court also imposed a compliance plan. DOJ said the company knew, or was willfully blind to, the plywood's unlawful importation through a supplier that concealed its Chinese origin.

The importer's principals had earlier received 57-month prison sentences (opens in a new tab) and forfeiture orders of more than $42 million. Those amounts were ordered; their collection is a separate question.

This is the important precedent: U.S. purchasers cannot ignore credible signs of unlawful sourcing and assume the legal risk stops with an importer or supplier.

Bloomberg reported (opens in a new tab) on April 23 that Altana's supply-chain analysis (opens in a new tab) identified roughly $300 billion a year in tariff-exposed goods reaching the United States through Southeast Asia and Mexico, alongside a 76% increase in activity on suspected transshipment routes during 2025.

These figures indicate the scale of trade-route changes after tariffs rise, not $300 billion in proven fraud. New factories, production changes and lawful rerouting can alter supply chains. The legal question is whether the country of origin declared to CBP reflects what was actually manufactured.

Enforcement requires investigators to test inputs, manufacturing processes and the transformation of goods, not infer fraud from trade flows alone. Where origin declarations are false, the government must pursue the duties and those responsible.

The Port Arthur Area Shrimpers' Association (PAASA) has joined EnforcementNOW, bringing the experience of Gulf Coast fishing families into the coalition. Its members confront unfairly priced imports and uneven enforcement of standards that American producers must meet.

PAASA and the Southern Shrimp Alliance (opens in a new tab) jointly challenged Peru's certification under U.S. sea-turtle protection rules in 2024. The State Department suspended Peru's certification in 2025, restricting qualifying wild-caught shrimp imports. This was a concrete result of persistent industry advocacy, not an announcement of future action.

As our American Shrimpers case study illustrates, effective trade enforcement goes beyond tariffs. Standards must be enforced consistently or compliant U.S. producers bear costs their competitors can avoid.

The New York Times reported (opens in a new tab) that the average declared value of a 20-foot container arriving from China fell nearly 40% between January 2025 and February 2026. The investigation raises serious questions about undervaluation and false customs declarations, although differences in product mix mean the decline alone cannot establish fraud.

The vulnerability is longstanding. As our Enforcement Unraveled history explains, customs valuation shifted toward the price declared in the underlying commercial transaction, with verification relying heavily on importer documentation and later review. That design makes checking invoices and related-party prices critical.

The danger is immediate for lawful competitors: false low values reduce duties at the border, allowing prices that honest importers cannot match. CBP needs to verify disputed declarations, not simply record them.

Senator Bill Cassidy (opens in a new tab) introduced the Securing Accountability in Foreign Entries (SAFE) Act to close a longstanding customs enforcement weakness: importers can owe duties while having little verifiable U.S. presence or assets against which the government can collect.

The bill (opens in a new tab) would tighten importer identity, physical-presence, payment-account and bond requirements, while preserving specified arrangements for Canadian, Australian and other qualifying partners. Those details matter: legitimate cross-border trade is not itself a customs-fraud problem.

This is an important proposal, not enacted law. Verifying who imports goods and making the importer answerable for payment would give CBP a stronger basis for enforcement. Actual recovery would still depend on investigation and collection. Congress should advance a workable and enforceable solution.

Bloomberg documented (opens in a new tab) a $112 billion gap in 2025 between China's reported exports to the United States and U.S.-reported imports from China, alongside evidence of phantom importers and suspiciously low declarations. The figure is alarming, but it is not a measured fraud total.

What matters is the reversal. Before the 2018 tariffs, American import records generally exceeded China's corresponding export figures. New York Fed research (opens in a new tab) calculated that by 2024 the gap had moved about $158 billion from its pre-tariff benchmark. An earlier Fed study (opens in a new tab) examined how tariffs and reporting incentives contributed to the shift. These studies do not prove an equivalent amount of fraud.

Our Trade Crime Study Guide examines this wider problem. CBP must investigate what the discrepancy reflects, distinguish legitimate statistical effects from misdeclaration, and pursue recoverable unpaid duties where violations are established.

Homeland Security Investigations (HSI) is essential to trade-fraud enforcement: tracing import networks, securing evidence and building cases with DOJ. Reuters reported (opens in a new tab) extensive reassignment of federal investigators toward immigration operations, and a January congressional letter (opens in a new tab) sought an accounting of the impact on complex investigations. The specific loss of HSI trade-fraud capacity has not been quantified publicly.

Immigration enforcement and trade enforcement are not competing definitions of national security. Illegal goods also cross the border, depriving lawful companies of business, weakening industrial capacity and, where deliberate fraud is established, denying the government duties owed.

Border security must include economic security. DOJ cannot prosecute major customs cases without capable investigators, continuous case development and specialized expertise at HSI. Congress and the administration should ensure trade-crime investigations receive the sustained resources they require.

EnforcementNOW launched a public Trade Fraud Case Tracker bringing together significant U.S. customs-fraud investigations and outcomes, including DOJ prosecutions, False Claims Act settlements, CBP actions and trade-remedy evasion cases.

The tracker allows manufacturers, journalists and congressional staff to examine what was alleged, what authorities did, how cases progressed and what penalties or recoveries resulted. That history matters: isolated announcements can create an appearance of progress without showing whether enforcement produces meaningful consequences.

The objective is clearer public accountability. A consistent record helps identify recurring fraud methods, long delays and gaps between amounts assessed, penalties imposed and money actually collected.