News / CBP 'ready and equipped' to deal with tariff dodgers, but questions linger

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Question marks linger over the Trump administration’s plans to slap charges on goods being transhipped to evade its new tariffs.

Through an executive order issued by the president at the end of July, goods deemed by US Customs and Border Protection (CBP) to have been transhipped for that reason will be subject to an additional tariff of 40% – on top of country-of-origin duties.

The order took effect this month alongside the wave of new country-specific tariff rates, ranging from the 10% allocated to the UK, to 51% slapped on Brazil.

In addition, the order warned transhipped goods could be subject to “any other applicable or appropriate fine,” indicating the potential for further punitive measures for tariff evaders.

However, sources who spoke with The Loadstar claimed there was an absence of clarity over what defined a transhipped good.

On LinkedIn, customs platform Tru Identity’s chief executive, Hugh Pakula, asked whether companies that manufacture overseas, before shipping via a third country to split inventory for storage, would be subject to the rule.

He also asked: “Will those who ship with a carrier that docks in a third country before departing for the US [be sanctioned]?

“What about companies that use post to deliver goods to their US customers and the postal carrier decides to route it through a third country? Or which manufacture finished products in one country, package them in another, and then ship to the US?”

Echoing others The Loadstar spoke to, he said that assessing duty on goods sent by those intentionally seeking to dodge country-of-origin rates had long been an issue for CBP.

Not responding to questions on what would be demarcated as transhipment, the CBP claimed to be “ready and equipped” to address not only issues of transhipment, but “all forms of duty evasion”.

A spokesperson told The Loadstar: “CBP aggressively combats duty evasion to protect American businesses and workers.

“Through the Enforce and Protect Act, CBP investigates companies that attempt to evade antidumping and countervailing duties. Most recently, CBP uncovered more than $400m in duty evasion schemes designed to undercut US industries.”