U.S. President Donald Trump is set to launch a new round of tariffs next week, as federal prosecutors prepare criminal charges against companies and individuals seeking to evade the measures. U.S. Customs has long struggled to thwart relatively common tax evasion tactics, such as tampering with the country of origin of imported goods or misclassifying them on declarations. However, such issues have historically been dealt with through fines or civil settlements, with parties rarely facing criminal prosecution.
But now, the Justice Department says it is adding "substantial personnel" to a new unit to focus its efforts on combating trade fraud and other corporate crimes. Meanwhile, the federal prosecutor's office is seeking to build cases of related tax evasion and has been requesting records of transactions involving foreign goods during the previous presidential administration, drawing a potential blueprint for cracking down on those accused of evading new tariffs.
A U.S. Customs and Border Protection officer stands in front of a truck awaiting inspection at the Otay Mesa cargo port in San Diego, California
"While some negligent acts or administrative errors may be better suited to civil proceedings, criminal enforcement is appropriate for serious violations," said Matthew Galeotti, Special Agent in Charge of the Justice Department's Criminal Division. "For example, when importers commit fraud by underestimating the value of goods or misrepresenting their country of origin, they evade the full cost of importing products into the United States."
Trump promised in April that there would be "very tough" consequences for those who evade his global tariffs. It's unclear how the investigation into alleged tax evasion is progressing. The work could take months, with some of the new tariffs only weeks old and more expected to take effect from August 1.
U.S. officials say tax evasion could cost the government tens of billions of dollars in lost revenue each year. Galeotti said prosecutors were looking into industries including steel, aluminum, textiles and consumer goods. The work also involves the Financial Fraud Unit, whose members are tasked with cracking down on companies that evade tariffs.
The potential violations prosecutors are looking for involve not only tariffs imposed after Trump took office, but also in the lead-up to his inauguration in January, according to people familiar with the matter.
Federal prosecutors' offices outside Washington recently requested information about shipments and communications between the company and other companies in its supply chain during the former president's administration, said the people, who like others spoke on condition of anonymity to discuss confidential communications.
Prosecutors have traditionally relied on law enforcement agencies such as Homeland Security Investigations (HSI) and Customs and Border Protection (CBP) to bring them egregious tariff evasion cases that could escalate to civil or criminal prosecution. CBP also appears to be increasing its scrutiny of businesses affected by tariffs.
A container ship at APM Maersk Terminal in the Port of Los Angeles, California