Tariff Shortcuts Are Running Out of Room Under New CBP Rules

Key Takeaways: 

• President Trump’s June 3, 2026, “Strengthening Customs Enforcement” executive order authorizes CBP and DHS to overhaul importer eligibility standards, enforce a minimum 50% penalty floor, and deploy expanded data analytics surveillance against U.S. importers of all sizes.
• Common tariff-reduction tactics such as HTS misclassification, undervaluation, split invoicing, and unsupported country-of-origin shifts are now priority targets for CBP enforcement, carrying a five-year civil lookback period and penalties averaging $670,000 per audit.
• Companies that restructured their entry practices following the 2025 tariff increases should initiate a privileged customs compliance review before September 2026, when new penalty mitigation standards are scheduled to take effect.

The pace of customs enforcement has shifted more sharply in the past 18 months than in the previous decade. Rising tariff rates pushed many companies to rethink how they classify goods, structure invoices and designate importers of record. Some of those adjustments are lawful. Others aren’t, and CBP now has the tools to tell the difference.

A New Enforcement Reality for U.S. Importers

On June 3, 2026, President Donald J. Trump signed the “Strengthening Customs Enforcement” executive order, directing DHS and CBP to undertake a sweeping overhaul of importer eligibility, disclosure obligations, enforcement authority and penalty structures.

“CBP stands ready to enforce this Executive Order,” said CBP Commissioner Rodney Scott. “Importing into the U.S. has for too long been treated as a right and not a privilege. CBP will execute the priorities in this Executive Order and by doing so we will fortify our trading border just as we have done with our physical border.”

CBP wants to make evasion harder to sustain before it’s detected rather than relying primarily on penalties after the fact.

What is CBP Targeting and How Does It Find Violations?

CBP already uses the Automated Commercial Environment (ACE) portal, which was modernized in February 2025, to flag abnormalities in large volumes of trade data. The executive order significantly expands the data available for that analysis.

Within 90 days of signing, CBP is expected to require importers to submit documentation that foreign exporters previously provided to their own customs authorities. When those records contradict what’s reported to CBP at entry — on value, description, manufacturer or origin — the inconsistency becomes documentable and enforceable.

The agency’s analytical tools detect patterns: entered values that dropped after a tariff increase, HTS reclassifications without any corresponding product change, nominal U.S. importer entities with no real domestic presence. Entry acceptance is not approval. The statute of limitations for civil customs violations is five years.

Where Importers Face the Most Exposure

CBP’s 2025 enforcement data show that misclassification errors account for 42% of all penalty assessments. Valuation discrepancies, particularly undeclared assists, tooling, royalties, and license fees, represent another 31%. The executive order places both categories at the top of CBP’s enforcement priority list.

Foreign importer-of-record structures face additional pressure. Thinly capitalized or shell entities will need to demonstrate minimum tangible U.S. assets or increased bonding. A new “good standing” requirement means a compliance failure at any affiliated entity can jeopardize import privileges across an entire enterprise.

The penalty stakes have also risen. The order establishes a minimum 50% floor on assessed penalties, and for repeat offenders, mitigation is eliminated entirely. In 2025, CBP completed 200 audits in the first four months of the year, recovering $134 million in duties — a 67% increase over the same period in 2024. The average penalty per audit reached $670,000.

What Should Importers Do Before September 2026?

Companies that changed country-of-origin designations, changed HTS codes, split invoices, or restructured IOR arrangements after new tariffs took effect in 2025 should treat this executive order as an urgent signal.

Under current CBP guidelines, a valid prior disclosure made before the agency opens a formal investigation can considerably limit penalty exposure. That window is closing, though. New mitigation standards, including the 50% penalty floor, are expected to take effect within 90 days of the order’s June 3 signing, around September 2026.

A cross-functional review covering legal, supply chain, finance, and trade compliance should examine classification consistency, declared customs value, including all dutiable assists and royalties, country-of-origin positions, and the full IOR structure across affiliated entities. The cost of a proactive review is far lower than the cost of responding to a CBP inquiry.