Reported by Corinne Ramey

(Excerpt featured below. To read full report, go to: https://www.wsj.com/us-news/law/battling-tariff-fraud-is-a-little-known-front-in-trumps-trade-war-297d49b7?mod=Searchresults_pos1&page=1)

At the same time, the Justice Department’s shifting white-collar priorities to pursue tariff and customs-related cases more aggressively have helped create a perfect storm for more trade enforcement. And lawyers say they have seen a sharp increase in calls from whistleblowers looking to file their own cases about alleged wrongdoing. 

“You have a broad swath of industry that is highly incentivized to find a way out of this,” said Jake M. Shields, a partner at Gibson Dunn. “Many will do so lawfully, and others will do things that are close to the line—or cross it—and may get them in trouble with the Department of Justice.”

There are several ways importers typically seek to evade tariffs illegally. Companies can misclassify a product, for instance, by claiming that nightstands are living-room furniture. An importer could lie about a product’s value, claiming an item worth $100 is worth just $10. And a company could lie about what country a product is coming from to pay a smaller tariff. 

Companies can use similar methods to avoid tariffs without running afoul of the law, which is why there is some legal gray area, said Gregory Husisian, a partner at firm Foley & Lardner. They could change a product’s classification if it legitimately fits in two categories, he said, for example labeling a merchandise cart a hand cart instead of a type of movable furniture. 

Husisian said high-level company officials are now paying attention in a way they hadn’t previously. “I’ll have CEOs sit in on phone calls on tariff risk management,” he said. 

While Trump’s tariffs have been on a legal and political roller coaster, a number of them are already in place. Recently Trump delayed so-called reciprocal tariffs, giving countries until Aug. 1 to strike deals with the U.S. or face higher duties. 

The Justice Department has said pursuing trade-related criminal cases is a new priority. “Trade and customs fraudsters, including those who commit tariff evasion, seek to circumvent the rules and regulations that protect American consumers,” Justice Department official Matthew Galeotti wrote in a May memo.