The current administration's border enforcement priorities have extended to the import and export of goods. Trade compliance is now a central enforcement priority executed through presidential actions, agency releases, and informal guidance. That focus was signaled in the America First Trade Policy and has continued through the launch of the Trade Fraud Task Force and the issuance of the Strengthening Customs Enforcement executive order.
Most recently, the U.S. Department of Justice (DOJ) and U.S. Department of Homeland Security (DHS) issued the "Resource Guide to Trade Fraud Enforcement" (Resource Guide), the first comprehensive statement of DOJ's enforcement approach to customs and trade fraud. The White House Office of Trade and Manufacturing Policy released "The Great Transshipment Scam" (Transshipment Report), which outlines the administration's broad view of transshipment and signals increased scrutiny of China-linked supply chains. The Transshipment Report also describes the administration's planned use of artificial intelligence (AI) and other tools to identify potential transshipment and tariff evasion. Separately, the Bureau of Industry and Security (BIS) has increased enforcement actions and is more aggressively pursuing compliance failures.
Taken together, these developments underscore the need for importers, exporters, purchasers, and other supply chain participants to understand and address their compliance obligations before they become the subject of investigation or enforcement.
Resource Guide to Trade Fraud Enforcement
The Resource Guide, issued by DOJ and DHS through the Trade Fraud Task Force, is both a compliance primer and an enforcement roadmap for importers and purchasers of imported goods. It emphasizes that importers retain ultimate responsibility for the accuracy of entry information, even when using customs brokers, and that reasonable care requires more than accepting supplier representations at face value. Companies are expected to understand and document the value, origin, classification, composition, and production history of their goods; preserve supporting records; and audit supply chains for signs of negligence, willful blindness, or fraud.
The Guide also summarizes the principal enforcement tools available to U.S. Customs and Border Protection (CBP) and the DOJ, including administrative penalties and duty recovery under customs laws, False Claims Act exposure, whistleblower suits, and potential criminal charges for customs fraud, smuggling, conspiracy, money laundering, Racketeer Influenced and Corrupt Organizations Act (RICO) violations, and related forfeiture. Its forced-labor discussion highlights Section 307, Withhold Release Orders, Findings, and the Uyghur Forced Labor Prevention Act's (UFLPA) rebuttable presumption for covered goods, which can require clear and convincing evidence to overcome.
The Resource Guide identifies common trade-fraud typologies, including false origin, classification, valuation, Antidumping and Countervailing Duty (AD/CVD) treatment, manifests, drawback or free-trade claims, shell importers, broker misconduct, forged certifications, port shopping, and failure to report defects involving regulated products. These schemes often overlap and may expose downstream purchasers or supply chain participants when they knowingly, recklessly, or blindly rely on inaccurate information. For companies potentially implicated by these risks, targeted internal audits, supplier diligence, broker oversight, and documentation reviews are a prudent first step before CBP or DOJ scrutiny begins.
White House Transshipment Report
The Transshipment Report issued by the White House Office of Trade and Manufacturing Policy describes illegal transshipment as routing goods through lower-tariff countries and using minor processing, relabeling, repackaging, re-invoicing, or false origin claims to avoid U.S. duties. It signals the administration's focus on production hubs, free zones, warehouses, ports, and re-export centers spanning more than 40 countries as potential means for duty evasion.
Importers with complex manufacturing supply chains must coordinate with offshore partners and proactively validate country-of-origin declarations in advance of the increased scrutiny that is likely to result from the report.
Forced Labor Focus
Addressing forced labor concerns in supply chains is a key issue for the current administration. This is illustrated by the Resource Guide's dedicated chapter on forced labor enforcement and the latest tariffs announced by the United States Trade Representative under Section 301 targeting global forced labor bans. CBP has substantial authority to address forced labor concerns through Section 307, Withhold Release Orders, and UFLPA investigations. Importers face distinct deadlines, response obligations, and risks depending on the authority involved. Understanding this varying landscape is essential.
For example, DHS added 43 new companies to the UFLPA Entity List on July 31, 2026, bringing the total number of listed entities to 187. The new entities include companies in high-priority enforcement sectors, including aluminum, apparel, copper, cotton, tomatoes, and downstream products. According to DHS, this was the single largest expansion of the UFLPA Entity List, underscoring the administration's increased focus on forced labor enforcement. Importers and supply chain participants must understand their exposure to forced labor-related risk. Companies can address this risk primarily by coordinating with overseas partners to develop supply chain transparency before CBP or DHS requests information or launches a formal investigation.
AI Enforcement
In addition to discussing alleged transshipment, the Transshipment Report introduces a proposed "AI Detective Border." The AI Detective Border will combine shipment data, routing histories, ownership links, production capacity, anomaly detection, and computer vision to support interdiction, penalties, duty collection, and exclusion. This coincides with CBP's numerous announcements that it is partnering with AI companies to validate trade data and ensure compliance within the industry.
Importers of record, brokers, and all parties along the supply chain who provide information upon which CBP relies must now be cognizant of the fact that such information is likely screened by AI for errors, patterns of noncompliance, or other issues, resulting in more CF-28 requests for information and increased enforcement volume.
Enforcement Actions Demonstrate Escalation
Recent DOJ and CBP releases show active enforcement against both import- and export-related trade fraud. On July 15, DOJ announced a $7.3 million False Claims Act settlement with Redi-Bag USA and its CEO over allegations that Chinese-made bags were transshipped through Hong Kong and falsely declared as Hong Kong-origin to evade antidumping duties of up to 77.57 percent.
On July 29, CBP announced that its 2026 Enforce and Protect Act investigations had identified more than $1 billion in additional duties owed, the program's highest total, through investigations targeting illegal transshipment, misclassification, and undervaluation involving products ranging from solar cells and lumber to pipes and furniture.
Export Enforcement Also Escalating
BIS has increased export-control-related enforcement actions. BIS has tightened its license determinations and is adding new conditions on licenses when granted. This policy of more firm control over exports has led to an increase in administrative enforcement actions. BIS also relies on DOJ where a criminal element may exist. Additional funding to expand BIS's Export Enforcement arm is expected to be granted, which will add additional Export Control Special Agents.
How Importers, Exporters, and Partners Can Prepare
Industry should expect increased scrutiny of country-of-origin, classification, valuation, sourcing, and product-safety representations, including greater attention to downstream parties and transactions routed through identified transshipment-risk jurisdictions. Companies should map their supply chains, verify substantial-transformation claims, test supplier and broker representations, and confirm that declared origins align with actual production capacity, routing, ownership, and component data.
Importers should also audit Automated Commercial Environment (ACE) filings, document reasonable-care procedures, preserve supporting records, and promptly investigate anomalies or adverse information. Because AI-assisted targeting may detect inconsistencies across shipments and related entities, companies should assess patterns across their complete import activity rather than reviewing entries individually.
Exporters should confirm whether their products are classified on BIS's Commerce Control List (CCL). They should also ensure that they understand the level of control for the primary export destinations and conduct diligence checks on all customers and partners.
Baker Donelson's International Trade and National Security Team will continue to monitor developments and provide updates as warranted. If you have any questions or would like to discuss this in further detail, please reach out to P. Lee Smith, Matthew McGee, or any member of the team.