Trump Administration Steps Up Crackdown on Tariff Evasion... KITA Urges Companies to Strengthen Compliance Management

by Kwon Hyeonji

Published 21 Jun.2026 11:00(KST)

KITA Releases Report on "Trends in Strengthened U.S. Responses to Tariff Evasion"

U.S. Drastically Tightens Import Declaration Verification and Customs Enforcement

"Companies Should Review Product Classification and Origin in Advance and Promptly Correct Any Errors"

The Trump Administration's second term is ramping up the verification of import declarations and enforcement measures to ensure the effectiveness of high tariffs. As a result, there are recommendations for Korean companies exporting to the United States to take proactive measures.

On June 21, the Korea International Trade Association’s Institute for International Trade and Commerce released a report titled "Trends in Strengthened U.S. Responses to Tariff Evasion." According to the report, as the U.S. has become more rigorous in verifying import declarations and cracking down on tariff evasion, there have been increasing cases where companies found in violation are being held liable for significant compensation. In particular, after U.S. President Donald Trump signed an executive order on June 3 to strengthen customs enforcement, importers’ responsibilities and import declaration and documentation requirements are expected to become even stricter.

The Trump Administration’s intensified enforcement is attributed to the recent introduction of stricter tariff measures, which has led to a rise in attempts to evade tariffs through various means such as false origin declarations, underreporting of prices, misclassification of items, and washing of origin through transshipment via third countries. In the past, the U.S. government’s crackdowns on tariff evasion mainly focused on administrative sanctions by U.S. Customs and Border Protection (CBP), such as the collection of duties and fines. However, there have recently been cases where these issues have escalated into civil lawsuits or even criminal indictments, depending on the circumstances. The report noted, "Since the start of Trump’s second term, CBP and the Department of Justice, among other relevant agencies, have been actively cooperating to strengthen enforcement, resulting in more diversified sanction measures."

The report also highlighted that tips from insiders, such as competitors or current and former employees who are familiar with a company’s internal affairs, are becoming a major avenue for detecting tariff evasion. Whistleblowers can file civil lawsuits on behalf of the government under the False Claims Act (FCA), and violators may be liable for compensation up to three times the government’s losses. Recently, the fact that whistleblowers can receive 15 to 30 percent of the compensation recovered by the government in tariff evasion cases has further increased the incentive to report violations.

However, the report advised that not all errors in tariff declarations lead to civil lawsuits or criminal indictments, and that calm and thorough preparation is needed rather than excessive concern. Criminal indictments are mainly brought against deliberate acts of trade fraud, such as submitting false documents or washing the origin through transshipment via third countries, and most of these cases have involved Chinese products. Even if some errors are found, the level of sanctions is determined by whether the company exercised reasonable due diligence and the extent of its cooperation during the investigation. Therefore, it is important to respond diligently even if allegations are raised.

Yoo Jin Lee, Senior Researcher at the Korea International Trade Association, stated, "The U.S. government has sufficient incentive to ensure the effectiveness of existing tariff measures in order to make up for revenue shortfalls caused by tariff refunds under the International Emergency Economic Powers Act (IEEPA). Our companies must thoroughly review key declaration items such as product classification, country of origin, and dutiable value in advance, and promptly correct any errors found. At the same time, companies should reinforce their internal compliance systems and, if they become the subject of an investigation, actively utilize relief procedures such as submitting explanatory materials and requesting mitigation to minimize potential damages."