White House escalates trade fraud enforcement with AI

The White House has warned that illegal transshipment used to evade Trump tariffs will face intensified enforcement, with US Customs and Border Protection developing an AI-enabled detective border. The system is intended to analyze shipment data, routing histories, product classifications and other records to flag inconsistencies in origin claims, valuations and trade routes.

The White House report estimates transshipment is draining the US treasury of $10 billion to $100+ billion in lost tariff revenue each year. It links increased third-country routing to Section 301 tariffs on China imposed in 2018, citing jurisdictions including Vietnam, Malaysia, Thailand, Mexico and Cambodia. China-origin transshipment remains the main enforcement focus, though other higher-tariff countries are also alleged to be adopting similar practices.

On August 13, the DOJ’s National Fraud Enforcement Division separately identified global trade and commerce as a priority, covering illicit transshipment, country-of-origin fraud, undervaluation, sanctions evasion and forced labor schemes. The division is expected to have 500 attorneys and other staff by late August and to continue expanding for the next two years.

Companies with global supply chains face greater risk of data-driven scrutiny, civil penalties and potential criminal prosecution. Importers, especially those tied to China supply chains, are being advised to review customs filings, supplier records, shipping data and internal communications, and to respond carefully to CBP requests, DOJ subpoenas or notices of detention or seizure.