Trump’s New Tariffs Reshape Global Trade, Elevate Legal Risks for Importers

President Trump’s return to the White House in January 2025 has ushered in swift and far-reaching changes to U.S. trade policy, with new tariff requirements sending shockwaves through global and domestic markets. The administration’s aggressive approach has strained long-standing relationships with key trading partners including Mexico, Canada, the European Union, and most notably, China.

For multinational companies, the stakes are particularly high. Failure to comply with these new duties and tariffs carries potentially severe civil and criminal penalties. With Attorney General Pam Bondi emphasizing the Department of Justice’s continued focus on the False Claims Act as a critical enforcement tool, companies engaged in international trade face a complex web of compliance challenges and potential legal exposure.

The Trump administration has wasted no time implementing its “America First” trade agenda. On his first day in office, President Trump issued a memorandum outlining a trade policy aimed at enhancing national security, addressing trade deficits, and promoting American economic interests.

By April 2, 2025, the president had declared a national emergency due to U.S. goods trade deficits, which he attributed to non-reciprocal trade practices by foreign partners. In response, he imposed a sweeping 10% tariff on imports from all countries, with higher rates for nations with significant trade deficits.

China has faced particularly harsh measures. Beyond the universal 10% tariff, Chinese imports were hit with additional increases of 84% and then 125%, effective April 10, 2025. The administration also eliminated duty-free treatment for low-value Chinese imports beginning May 2, 2025.

Canada and Mexico haven’t been spared either. On February 1, 2025, President Trump imposed a 25% tariff on imports from both countries, with a lower 10% rate for Canadian energy resources. Though these tariffs were briefly paused, they eventually took effect with exemptions only for goods qualifying for duty-free treatment under the U.S.-Mexico-Canada Trade Agreement.

Specific industries have received targeted attention. Steel imports now face a 25% tariff, while aluminum tariffs have been raised to 25% and expanded to include derivative products. Automobile imports and certain parts have been hit with a 25% tariff due to cited national security concerns.

The administration has also directed investigations into potential tariffs on copper, timber, lumber, and critical minerals. While pharmaceutical products have so far been exempted from some of the highest rates, the administration has hinted at forthcoming pharma-specific tariffs.

“Companies must act promptly to strengthen their compliance frameworks and ensure their customs and tariff practices are both current and tailored to mitigate potential liability,” said a trade compliance attorney familiar with the new regulations.

The legal risks for importers extend beyond traditional customs penalties. Under Section 592 of the Tariff Act of 1930, the United States can pursue civil penalties for fraudulent, grossly negligent, or negligent entry of merchandise through false information or material omission. Penalties can range from multiples of the duties avoided to the total value of the goods.

Criminal liability presents an even more severe threat. Importers who knowingly falsify classifications or make false statements to evade tariffs could face fines and imprisonment of up to 20 years under the International Emergency Economic Powers Act.

The False Claims Act adds another layer of risk. As a powerful civil enforcement tool, it imposes liability for knowingly submitting false claims for payment to the government and for knowingly avoiding obligations to pay money to the government. Importers must declare accurate information about their goods’ country of origin, value, and applicable duties, or risk FCA liability.

Recent settlements highlight the government’s increasing focus on customs violations. In April 2025, Evolutions Flooring, a California-based importer, agreed to pay $8.1 million to settle allegations that it knowingly evaded customs duties on Chinese-manufactured wood flooring. The case was initiated by a competitor under the FCA’s qui tam provisions.

Similarly, in December 2024, Alexis LLC paid $7.6 million to resolve allegations of underreporting the value of imported goods. Two Wisconsin-based sellers of wiring products paid $10 million to settle claims they used false invoices to avoid duties on Chinese imports. German industrial engineering company Linde GmbH and its U.S. subsidiary agreed to pay more than $22.2 million to resolve allegations of making false statements on customs declarations.

The healthcare sector faces unique challenges under the new tariff regime. Most hospital equipment, parts, and technology are manufactured outside the U.S., including essential items like ventilators, imaging machines, surgical gloves, masks, and other medical supplies. A significant portion of pharmaceutical ingredients also originates from India, China, and Europe.

While the American Hospital Association has advocated for medical exemptions from the tariffs, only pharmaceuticals have received partial relief so far. The administration has indicated that pharma-specific tariffs are on the horizon, creating uncertainty for the healthcare supply chain.

To mitigate these risks, international market participants must prioritize compliance with evolving tariff obligations. Companies should assess, track, and ensure adherence to updated customs rules while instilling a culture of compliance through training and robust internal controls. Prompt investigation of potential misconduct and consideration of self-disclosure options with experienced legal counsel can help minimize exposure in this rapidly changing trade environment.