OP-ED: U.S. Customs — The Executive Order That Turns the Hunt for Tax Evaders Into a Tax War Machine

A Radical Redefinition of Who Can Import

The decree’s first major change concerns Importers of Record (IORs)—the entities legally responsible for the entry of goods into the United States. The text draws a clear line between U.S. IORs and foreign IORs. Any importer that is not incorporated under U.S. law, does not own significant real property in the United States, or whose beneficial owners are not U.S. citizens or lawful permanent residents is considered a foreign IOR. This is a broad definition that will encompass thousands of companies that have been importing without major difficulties until now.

Within 180 days of the executive order’s signing, all IORs must maintain a minimum level of domestic tangible assets or a bond, provide CBP with additional data—including projected import volumes, disclosure of beneficial and actual ownership, and business affiliations—and maintain “good standing” ” as defined by CBP based on compliance history. Importers who fail to meet these requirements will be barred from importing. No penalty. A flat-out ban.

Foreign IORs Are a Top Priority

Foreign IORs face even stricter restrictions. They will be prohibited from using informal entries—a simplified mechanism commonly used for low-value imports. For formal entries, they will no longer be able to use continuous bonds unless they individually demonstrate to CBP that customs revenue would be fully protected. In addition, they must be certified under the CTPAT (Customs-Trade Partnership Against Terrorism) program or use a customs broker who is CTPAT-certified.

In its June 9, 2026, analysis, the law firm Holland & Knight details the practical implications: Canadian companies that sell to U.S. customers on a DDP (Delivered Duty Paid) basis—that is, by acting as the importer of record themselves—will be directly affected. Foreign companies that have established U.S. subsidiaries without real property in the United States could also find themselves classified as foreign IORs, with all the resulting constraints. The reform is structural, not cosmetic.

There is much talk of large Chinese multinationals using shell companies to circumvent tariffs. But this executive order will have a much broader impact. Canadian SMEs, European distributors, and perfectly legitimate Asian e-commerce businesses will find themselves caught in the mesh of a net designed to catch fraudsters. That is the price of rigor: it is rarely applied with surgical precision.

A Profession Now Jointly Responsible for Compliance

Customs brokers—those licensed intermediaries who handle the formalities for the entry of goods on behalf of importers—find themselves at the heart of the new system. Until now, their liability in the event of fraud committed by their clients was limited. The decree of June 3 radically changes this equation. CBP will now be able to impose maximum penalties on brokers who fail to exercise due diligence regarding their clients, who repeatedly represent non-compliant importers, or who fail to respond in a timely manner to CBP requests for information.

Susan Thomas, CBP’s Executive Deputy Commissioner, was explicit in a LinkedIn video: “Customs brokers are responsible for vetting their clients more thoroughly.” This simple statement sums up a profound transformation. The customs broker is no longer merely a provider of administrative services. They are becoming a key player in compliance, with all the financial and legal risks that entails. The NCBFAA (National Customs Brokers & Forwarders Association of America) reported on June 5, 2026, that brokers would face more audits and that those who repeatedly represent non-compliant importers risk severe penalties.

Ongoing vetting as the new industry standard

The executive order also requires that, within 180 days, CBP establish enhanced and ongoing verification procedures for all parties directly involved in imports: brokers, freight forwarders, bonded warehouses, and their affiliates. Lenny Feldman, the NCBFAA’s customs legal counsel, noted that CBP is already “very deliberately” requesting identification documents and passports to verify the identities of importers who grant powers of attorney to brokers. This level of scrutiny did not previously exist on this scale.

For brokers working with large volumes of foreign importers—particularly in the cross-border e-commerce sector—the impact will be immediate. Some will have to completely overhaul their customer verification model, invest in continuous monitoring systems, or even refuse assignments deemed too risky. The customs services market will restructure accordingly, with a growing premium placed on players capable of demonstrating impeccable compliance.

I will not feel sorry for customs brokers who turned a blind eye to their clients’ questionable practices. This profession has benefited from an implicit code of silence for far too long. But I note that service providers are being transformed into customs police auxiliaries—without being given the investigative resources that this entails. This is a contradictory mandate that deserves to be called out.

A Revolution in the Mitigation of Customs Penalties

Among the measures in the executive order with the most immediate impact is the establishment of a minimum penalty threshold of 50% of the assessed amount. Until now, the U.S. mitigation system allowed importers to negotiate significant reductions—often down to nominal amounts—by citing the absence of fraudulent intent, extenuating circumstances, or simply that it was a first-time offense. That era is over. Within 90 days of the executive order’s signing, DHS must revise its mitigation guidelines to establish this minimum threshold.

The law firm Holland & Knight highlights the scope of this provision: “Under the old framework, penalties were frequently reduced to nominal amounts. That era appears to be over. ” Repeat offenders, however, will not benefit from any mitigation. Minimum liquidated damages will also increase. For an industry that had grown accustomed to treating customs errors as absorbable operational risks, this is a complete paradigm shift.

Enforcement Priorities Targeting Major Systemic Fraud

The executive order identifies four priority areas for enhanced enforcement of customs laws: forced labor, tariff misclassification, undervaluation of imports, and illegal transshipment—the practice of routing Chinese goods through a third country to conceal their origin and circumvent tariffs. These four vectors account for the bulk of U.S. tariff evasion. The executive order directs the Secretary of Homeland Security and the Attorney General to treat these as enforcement priorities, thereby mobilizing the DOJ alongside CBP.

The creation of a joint DOJ/DHS Trade Fraud Task Force dates back to August 2025—this executive order provides it with a stronger regulatory foundation and additional tools. Regarding transshipment, for example, the executive order expands documentation requirements: within 90 days, importers must provide CBP with any document that the foreign exporter was required to submit to its own customs authority prior to shipment to the United States. This is a brilliant measure in its logic: bringing foreign regulatory obligations into the U.S. framework to trace the actual origin of goods.

Chinese transshipment via Vietnam, Thailand, or Mexico is one of the most widely documented—and least resolved—issues in international trade over the past decade. If this executive order truly succeeds in addressing it, it will be an achievement whose scope will far exceed Trump’s tariff policy. It will be a victory for the integrity of global trade rules. And yes, even a man I regularly criticize can be right on a specific point.

A Technological Rollout Announced with Great Fanfare

One of the aspects that drew attention during the signing of the executive order was the emphasis placed on artificial intelligence in the new detection systems. Peter Navarro described the administration’s ambition during the June 3 press conference: “We are now able—in real time—to track every ship and every shipment leaving every port every day, process literally billions of bits of data, and determine with a high degree of probability whether there is tariff evasion or other issues such as drugs or illicit goods.” The rhetoric is spectacular. The technological reality is more nuanced.

CBP has been working for years to improve its Automated Commercial Environment (ACE) system—the central import monitoring system. The modernization of this system was, in fact, at the heart of the difficulties encountered in processing IEEPA tariff refunds in March 2026, when CBP informed the court that it could not process more than 54 million individual refunds without a technological upgrade. The executive order calls for accelerating this modernization by incorporating predictive analytics capabilities to identify evasion patterns. But concrete results will take months, if not years, to materialize.

New Identifiers and Supply Chain Traceability

On a practical level, the executive order requires the provision of new trade identifiers—foreign tax identifiers and Global Business Identifiers (GBIs)—as well as detailed supply chain data: product model or style numbers, composition, grade, and dimensions. This information will enable CBP to cross-reference customs declarations with external trade databases to detect inconsistencies. The law firm Holland & Knight notes that this represents a significant expansion of the data available to customs investigators.

Importers will also be required to certify their compliance with the Countering America’s Adversaries Through Sanctions Act (CAATSA), the anti-smuggling law 18 U.S.C. § 545, and other statutes designated by CBP. For companies that import electronic components, textiles, or food products from countries subject to sanctions or suspected of using forced labor—particularly China—these certifications will create considerable legal risks. A false declaration subject to criminal prosecution is a whole different matter from a simple customs fine.

Customs AI both fascinates and worries me. I have no doubt about the ability of algorithms to detect patterns of evasion that human agents would never see. What I don’t know—and what no one really knows yet—is how these systems handle false positives, and what concrete recourse a legitimate importer has when an algorithm flags them as a fraudster. Customs law hasn’t caught up with AI yet. And that’s a ticking time bomb.

After IEEPA: The Search for a Legal Fortress

The most significant validation of this executive order is not tariff-related—it is constitutional. Since the Learning Resources v. Trump decision on February 20, 2026, the Trump administration has been at war with the federal courts on the trade front. The IEEPA tariffs have been struck down. The Section 122 tariffs are being challenged. Even the major steel and aluminum tariffs under Section 232 are facing increasing legal pressure. In this context, an executive order that relies on traditional customs authorities—Title 19 of the Code of Federal Regulations, laws dating back decades—is structurally much more difficult to challenge in court.

The law firm Covington & Burling summarized the issue on June 5, 2026: the executive order specifies that it must be implemented “in accordance with applicable law, including the Administrative Procedure Act,” which means that certain provisions will require a rulemaking process with public consultation. While this certainly slows the process down, it also provides partial immunity against legal challenges: if CBP scrupulously follows the APA procedure, it will be much more difficult for a plaintiff to obtain an injunction. The Trump administration has learned—the hard way—that procedural shortcuts end in judicial disaster.

The Shift Toward Sections 301 and 232 as the Tariff Backbone

In parallel with this implementing executive order, the administration is rebuilding its tariff framework on a more solid foundation. As detailed in the Atlantic Council’s Trump Tariff Tracker (updated June 17, 2026), two major Section 301 investigations are underway: one on structural industrial overcapacity in sixteen countries, the other on forced labor practices in sixty economies, covering “nearly all U.S. imports.” Section 301 grants the president tariff authority that is much more explicitly delegated by Congress than under the IEEPA. And Section 232, based on national security, remains in place—its tariffs on steel, aluminum, and copper have withstood legal challenges.

The June 3 executive order is part of this restructuring strategy: while White House lawyers rebuild the tariff wall via Sections 301 and 232, CBP is tasked with maximizing revenue from existing tariffs by cracking down on evasion. The two moves are complementary. One looks to the future—rebuilding tariffs on a solid foundation. The other looks to the present—collecting what is owed. It’s a coherent strategy, even if it’s being carried out by an administration for which consistency isn’t always a hallmark.

I have to be honest: I’m not entirely comfortable with the direction this issue is taking. The Trump administration is building a customs fortress that, piece by piece, is becoming less vulnerable to legal challenges. Which, in theory, should reassure me—we want the laws to be enforced. But the same tools used to track down Chinese fraudsters could be applied to European or Canadian allies, and that’s where we enter a zone of trade tensions that doesn’t sit well with me.

A Major Cleanup of the Active Importers Database

One of the least publicized but potentially most disruptive aspects of the executive order is the directive given to CBP to purge the registry of inactive IORs and create a risk-based system for active importers. The U.S. Importer of Record registry is currently cluttered with “ghost” entities—companies created for a single transaction, subsequently abandoned, but still registered and sometimes reactivated for fraudulent purposes. CBP must verify the compliance of active IORs and assign them a risk level based on their audit and inspection history.

This measure, which appears to be purely administrative, has far-reaching implications. Companies that have used legitimate but complex structures—subsidiaries, holding companies, and transit agents—could find themselves reclassified into high-risk tiers, triggering additional audits, stricter bond requirements, and longer customs clearance times. Against the backdrop of global supply chains already under strain due to the pandemic and trade wars, any additional delay comes at a direct cost. Companies that thought they had optimized their logistics will have to recalibrate their models.

Informal Imports and E-Commerce in Turmoil

The cross-border e-commerce sector is particularly vulnerable. The ban on foreign IORs using informal entry channels—which cover packages valued at less than $2,500, the low end of commercial imports—will directly impact thousands of online sellers operating from China, Taiwan, Hong Kong, Singapore, or other Asian countries. These sellers relied heavily on the “low-value” status to avoid full customs formalities and, in some cases, to underdeclare the value of goods. That door is now closing.

The NCBFAA reported that Lenny Feldman sees “an unprecedented level of scrutiny regarding the right to import” goods. This wording applies to both large manufacturing companies and small e-commerce sellers. The cross-border B2C e-commerce ecosystem, dominated by platforms like Shein, Temu, and AliExpress—whose logistics models relied heavily on the flexibility of informal entry and de minimis thresholds—will have to reinvent itself. This is structurally painful, but economically justified.

Shein and Temu have thrived on U.S. regulatory arbitrage. I’m not shedding any tears for them. What concerns me is the ripple effect on low-income American consumers who have grown accustomed to buying inexpensive products on these platforms. The line between protecting domestic industry and impoverishing low-income households is thinner than it seems, and the Trump administration doesn’t appear to be giving it much thought.

The Decree as a Foreign Policy Tool

The executive order is not limited to revenue collection. It is explicitly positioned as an instrument of national security. The preamble is clear: “The enforcement of customs laws is essential to the national security, foreign policy, and economy of the United States.” ” The list of importers who will never be granted “good standing” status expressly includes those who have been involved in the importation of fentanyl, chemical precursors, or any other contraband. This is a final decision, with no described procedure for reinstatement.

Regarding forced labor, the executive order draws upon several existing laws, notably the Uyghur Forced Labor Prevention Act and CAATSA. Importers will be required to certify that their supply chains do not rely on forced labor, with criminal penalties for false certification. For companies that source components from China—a massive portion of the global industrial base—this certification requirement will necessitate audits of second- and third-tier suppliers at a level of depth never before required. This is costly, complex, and potentially very revealing.

China as the Implicit Target of the Entire Framework

Although the executive order does not mention China by name—with the exception of references to CAATSA and supply chain concerns—the structure of the text is designed around Chinese trade practices. Transshipment via third countries, false declarations of origin, the use of shell companies, and the misuse of informal entry channels for low-value shipments: all these practices are overwhelmingly associated with Chinese exporters and their intermediaries in analyses by the U.S. Trade Representative. China is not mentioned. It is the target.

The Biden administration had attempted to plug some of these loopholes in a targeted manner—notably regarding the de minimis threshold, the exemption for packages valued at less than $800 that has been widely abused. The Trump administration is going much further and taking a systemic approach. By forcing foreign IORs to establish a genuine presence in the United States—through real estate assets, substantial surety bonds, and disclosure of beneficial owners—the executive order makes the type of tariff-evasion scheme that U.S. authorities have been documenting for years structurally more costly and risky. It is a trade war waged through customs forms, but it is no less real for that.

China is indeed the central target of this reform. And I stand by that. For twenty years, Beijing has built an export system that exploits every regulatory loophole, every threshold, and every exception. In the face of this “engineering of dependency,” a decree that says, “Show us your real assets, your real owners, your real supply chain,” strikes me as a minimal and legitimate response—even if it comes from a president whom I would criticize on just about everything else.

An Aggressive but Well-Structured Timeline

The executive order sets out a four-phase implementation timeline. Within 45 days (by mid-July 2026), the Secretary of Homeland Security must submit legislative recommendations to the President to strengthen the enforcement of customs laws. Within 90 days (early September 2026), the new penalty mitigation rules must be revised, foreign export documentation requirements established, expedited seizure procedures implemented, and in-depth transparency reports prepared. This is the phase that will have the most immediate impact on importers in terms of penalty risk.

Within 180 days (late November 2026), more far-reaching structural reforms will take effect: new IOR eligibility rules, asset and bond requirements, a good-standing system, and enhanced vetting of all participants in the import chain. This is the phase that will force companies to restructure. In one year (June 2027), an effectiveness report will be submitted to the president. This timeline is ambitious, but the law firm Holland & Knight notes that many of these changes can be implemented through regulatory amendments that the CBP can manage on its own, without waiting for new legislation.

Practical Recommendations for Importers

Law firms specializing in international trade law are unanimous: the time for a passive response is over. Covington & Burling recommends that all U.S. importers closely monitor the rollout of the new regulations, seek to participate in public comment procedures, and review the adequacy of their customs compliance programs. Sidley Austin emphasizes that companies should “seize opportunities to comment on or influence the implementation process”—because it is there, over the next 90 days, that critical details will be decided.

For foreign IORs and the companies that use them, the window for restructuring is narrow but real. Those who act now—by transferring the IOR to a U.S. entity with real assets, obtaining CTPAT certification, and strengthening supplier audits—will be in a much more comfortable position than those who wait for the first CBP orders. U.S. customs law rarely rewards procrastination, and this executive order even less so than previous ones.

I have seen too many companies wait until the last minute on regulatory reforms to have confidence in their collective ability to anticipate change. Most of the importers affected will spend the next few months watching to see who makes the first move, waiting for the first CBP circulars, and hoping that the deadlines will be pushed back. Some will be right. The others will pay dearly for this strategy. And the customs brokers advising them will have to decide whether to go along with this wait-and-see approach or to take the initiative.

Filling the Revenue Shortfall in the Post-IEEPA Era

Behind the decree’s security rhetoric lies a harsh budgetary reality. The Supreme Court’s decision invalidating the IEEPA tariffs has potentially deprived the U.S. Treasury of tens of billions of dollars in annual revenue. Ongoing refunds—estimated at between $90 billion and $127 billion according to CBP, and possibly as high as $182 billion according to independent estimates reported by Reuters on March 5, 2026—represent a significant financial drain. In this context, any mechanism that increases revenue from legally valid tariffs becomes a fiscal imperative.

Peter Navarro quantified the stakes during the signing ceremony: “I guarantee you that the first year will be at least 15 billion, the following year 25, and there’s 80 to 100 billion that tariff evaders are stealing.” ” These figures are presented as savings—revenue recovered from existing fraud, not new taxes. It’s a rhetorically clever move: we’re not raising taxes; we’re just collecting what’s owed. But for companies that find themselves caught in the net—whether they’re fraudulent or simply ill-prepared—the distinction is purely semantic. The bill will be very real.

The Fiscal Credibility of Trump’s Trade Strategy

Treasury Secretary Scott Bessent stated in February 2026 that total tariff revenue would be “little or no change” despite the invalidation of the IEEPA—implying that other mechanisms would offset the shortfall. This executive order is one such mechanism. It is part of a three-pronged strategy: reinstating tariffs via Sections 301 and 232, maintaining the Section 122 surcharge pending appeal, and maximizing revenue collection through enhanced customs enforcement. If all three pillars hold, the administration’s fiscal strategy may indeed prove coherent. If one of them collapses again in court, the $15 billion announced by Navarro will remain in the White House’s PowerPoint presentations.

The $80 to $100 billion in tariff fraud cited by Navarro: I believe this figure is at the high end of that range. U.S. customs fraud has been massively underreported and underprosecuted for decades. What I don’t believe is that all of this can be recovered in 12 months with an executive order and a few CBP circulars. The structural transformation of a control system takes years. Navarro’s promise is political. The result will be more modest, but real nonetheless.

Between Adaptation and Resistance in the Workplace

The customs and international trade sector responded swiftly. The NCBFAA published an analysis on June 5, 2026, highlighting the challenges facing foreign IORs and the increased responsibility of brokers. Trade Compliance Records posted a reference guide online on June 6. Major specialized law firms—Covington, Sidley, Holland & Knight, and Torres Trade Law—all published detailed analyses in the days following the signing. The customs community reacted quickly, reflecting both the perceived gravity of the legislation and the commercial demand for advisory services.

On the critical side, the first voices to speak out highlight the risk of discriminatory treatment toward legitimate foreign importers. The broad definition of a foreign IOR could encompass Canadian, European, or Japanese companies that have been importing in good faith for decades. The requirement to own “a significant amount of real property in the United States” as a condition for being classified as a U.S. IOR is considered arbitrary by some practitioners. These criticisms are part of a broader debate over the executive order’s compatibility with U.S. trade obligations under the WTO and bilateral investment treaties.

Rulemaking Procedures as the Next Battleground

Covington & Burling has identified the APA rulemaking window as an opportunity for importers to influence the implementation of the executive order. Companies and trade associations should prepare to submit detailed comments during the public consultations that CBP will be required to hold before adopting the new regulations. This is where the critical details will be decided: the exact bond thresholds, the operational definition of “good standing,” and the practical procedures for verifying foreign IORs. Sidley Austin notes that these procedures “will offer opportunities for legislative engagement if customs reform is necessary.”

For well-organized companies with sufficient legal resources, this rulemaking window is a real chance to shape the rules in a more workable direction. For importing SMEs that cannot afford to hire law firms specializing in U.S. commercial law, the rules that emerge will be those shaped by large corporations. This is a structural inequality inherent in the U.S. rulemaking system, and this executive order is no exception to this immutable rule.

As an observer in this story, I see the age-old democratic paradox of U.S. rulemaking: those who have the means to influence the rules are the ones who need the least protection from them. Average importers, SMEs, and bona fide actors without a legal army will be left with the rules that multinationals have agreed to have written. It’s frustrating, but that’s how regulation works in a system dominated by lobbying.

Allies Who May End Up Paying the Price

While the executive order clearly targets fraud originating in China, the measures it employs do not distinguish based on the victims’ nationality. Canadian, European, and Japanese companies that use import structures without a U.S. physical presence, or that rely on foreign IORs to ship on a DDP basis, will find themselves subject to the same stricter rules as the fraudsters the executive order purports to target. Holland & Knight specifically highlights the example of “Canadian companies that sell to U.S. customers on a DDP basis”—a common practice in North American cross-border trade.

The European Union, already engaged in tense tariff negotiations with Washington following the challenge to post-IEEPA agreements, will need to closely monitor the implementation of these new rules. If European exporters find themselves systematically reclassified as foreign IORs and subject to disproportionate obligations, this could constitute yet another trade dispute at the WTO. The Trudeau government in Ottawa has already expressed concerns about several aspects of U.S. trade policy—this executive order gives it yet another cause for concern. The transatlantic alliance is weakened every time Washington enacts legislation without consulting its partners.

Western Solidarity Put to the Test by Judicial Protectionism

I remain pro-West at heart. I believe the democratic bloc must remain united, strong, and cohesive in the face of the challenges posed by China, Putin’s Russia, Iran, and North Korea. But this solidarity is built on mutually respected rules of trade. When Washington treats its trading partners with the same suspicion as its adversaries—demanding the same disclosures, the same guarantees, and the same certifications from them—it further erodes the foundation of trust that makes the alliance possible. This is not an argument for inaction on trade. It is an argument for differentiated enforcement that protects relations with allied democracies while targeting malicious actors.

From this perspective, Trump remains a necessary evil for the West—a president who forces difficult conversations about trade dependence, about the naivety of free-trade rules in the face of actors who do not respect them, and about the need to secure critical supply chains. But a necessary evil is still an evil. And this executive order, in its collateral effects on allies, serves as a reminder that the brutal enforcement of U.S. trade policy does not always distinguish between friends and adversaries.

I write these lines knowing that I will displease everyone: the anti-Trumpers, who would have wanted me to condemn this executive order outright, and the pro-Trumpers, who would have wanted me to celebrate it without reservation. But my job is not to please you. It is to tell you what I see: an imperfect executive order, targeting real problems, with legally sound tools, but carried out by an administration that does not care about the collateral damage to its allies. And that is a problem that will outlive Trump.

Sustainable structural reform, regardless of who occupies the White House

The “Strengthening Customs Enforcement” executive order of June 3, 2026, is not just another chapter in Trump’s tariff saga. It is a structural reform of the U.S. customs system that is grounded in robust legal authority, addresses systemic failures documented for decades, and will have lasting effects well beyond the current administration’s term. Disclosure requirements, third-party risk management systems, strengthened obligations for customs brokers, and a 50% minimum penalty—none of these mechanisms will be easy to dismantle once implemented. They will become the new normal for U.S. customs.

In a post-IEEPA context where the administration seeks to rebuild its trade revenue architecture on legally unassailable grounds, this executive order serves several purposes simultaneously: it maximizes revenue collection from existing tariffs, deters systemic fraud, reorients CBP toward a mission of protecting tax revenue and national security, and generates data on global supply chains that the United States did not previously have at this level of detail. This is an investment in state capacity, and it is undoubtedly what makes it the most enduring trade measure of this administration.

A clear signal to fraudsters, a warning to everyone else

The executive order’s ultimate message is simple: the United States has decided that impunity in customs matters is over. Those who have built their business models on exploiting loopholes—false declarations of origin, undervaluation, transshipment, shell companies—will have to restructure or disappear from the U.S. market. Compliant customs brokers will have to choose between strict compliance and criminal liability. Legitimate but poorly organized importers will have to invest in compliance. And partner governments that were accustomed to a certain degree of U.S. flexibility regarding customs controls will have to adapt their trade practices to this new reality.

What happened on June 3, 2026, in the Oval Office was not just another signature. It marked the beginning of a regulatory overhaul that will redefine the terms of access to the world’s largest consumer market. And in this overhaul—unlike the spectacular tariff wars of previous years—the courts will find it much harder to veto the changes. That’s why this executive order really matters.

Signed, Maxime Marquette, columnist