On August 13, 2026, the Trump Administration released a report announcing its focus on illegal transshipment, where goods allegedly enter the United States through intermediary jurisdictions to reduce or avoid otherwise applicable duties, as a customs enforcement priority. The announcement arrives amid a sustained enforcement focus from the Administration on tariff evasion. Our prior blog posts on the U.S. Department of Justice to actively investigate tariff evasion-related misconduct, and an Executive Order directing agencies to tighten and escalate customs enforcement, are available here and here, respectively. The Administration has characterized the issue as large-scale tariff evasion and estimates that potential illegal transshipment and related tariff losses may reach tens of billions of dollars annually.
The White House report identifies more than 40 countries as presenting elevated illegal transshipment risk, including major trading partners and smaller jurisdictions with free zones, bonded warehousing, port access, lower labor costs, or limited customs capacity. While the report acknowledges that not every shift in sourcing reflects illegal conduct, enforcement must differentiate between legitimate supply chain shifts and unlawful pass-through activity. That distinction will be especially important for supply chains relying on China-plus-one sourcing strategies, multi-country production, or USMCA and other preferential-origin claims.
The report also discusses new enforcement tools and strategies to identify and tamp down on transshipment. U.S. Customs and Border Protection and other trade enforcement authorities are to launch an AI-enabled “detective border” approach to identify suspicious trade patterns at scale. The contemplated tools would analyze declared country of origin, routing histories, product classifications, ownership relationships, production-capacity indicators, packaging patterns, and even imaging data to flag transactions that appear inconsistent with the declared origin.
The new enforcement environment is likely to create heightened scrutiny for importers, customs brokers, foreign manufacturers, and third-country production or logistics hubs. Companies should consider reassessing origin determinations, supplier documentation, bills of materials, manufacturing records, routing data, and related-party transaction structures before an inquiry arises. Practical steps include confirming whether third-country processing satisfies applicable substantial transformation or preferential-origin rules, documenting local value-added and production capacity, reviewing customs broker instructions, testing for inconsistencies between declared origin and shipment routing, and preparing defensible files for higher-risk product lines. Importers should also expect enforcement questions to become more data-driven and faster-moving as authorities combine traditional customs audits and investigations with AI-supported anomaly detection. Lastly, importers should continue to monitor and adjust to new developments in customs enforcement as the Administration’s strategic approach continues to evolve.
