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False Claims Act seen as key tool to enforce Trump tariffs

While their form has been in flux — a 25-percent surcharge on steel and aluminum imports is in, while across-the-board levies on goods from Canada and Mexico are out, at least for now — tariffs will seemingly be a fact of life in the second Trump administration.

What’s the story?

• The False Claims Act is expected to be used as one of the main tools to combat tariff evasion in the second Trump administration, particularly with new tariffs including a 25 percent surcharge on steel and aluminum imports.
• Federal authorities are increasingly using artificial intelligence tools to detect customs fraud patterns, particularly in identifying suspicious shipping routes and potential transshipping schemes. Recent cases have resulted in significant settlements, including a $22.2 million settlement with a company headquartered in Germany, Linde GmbH.
• The legal landscape for FCA enforcement faces some uncertainty, with pending appeals challenging both the constitutionality of whistleblower provisions and the use of the FCA specifically in customs fraud cases. However, attorneys believe the challenges are unlikely to significantly impact the use of the FCA in the immediate future.

As the tariffs take effect, the incentive to try to evade them will follow. Eventually, attorneys agree, that will mean a new wave of “reverse” False Claims Act cases: Instead of taking too much from the government, the...

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