In a series of actions since Inauguration Day, President Trump has imposed steep tariffs on key U.S. trading partners across a broad swath of industries. At the same time, the U.S. Department of Justice (“DOJ”) has promised to ramp up use of the False Claims Act (“FCA”)—DOJ’s primary tool against fraud on government agencies—to police tariff compliance. The effect will likely be a redoubling of DOJ’s already aggressive application of the FCA to trade matters, fueled by tariffs’ status as a top policy and political priority. The risks for businesses are significant and likely will affect a broader range of industries than DOJ has historically targeted with trade-related FCA actions.

Read also: Trump’s Tariffs: What Supply Chain and Procurement Professionals Need to Know

President Trump’s Tariffs and the FCA Stakes

President Trump has imposed unprecedented and far-reaching tariffs on imports from some of the United States’ largest trading partners. Under the new tariff regime, any company importing virtually any item from anywhere now owes at least 10% of the value of that item to the U.S. government—and up to 145%, or more, for goods from China. Particularly for companies that import expensive products and materials in large volumes, this can mean massive sums in financial obligations to the U.S. government.

The FCA prohibits, among other things, the fraudulent retention of monies that a person or company is obligated to pay to the United States. Courts have acknowledged...

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