CBP Deploys AI to Probe $75 Billion in Tariff Evasion as Economist Warns of Higher Prices
Updated
Updated · WILX · Aug 14
CBP Deploys AI to Probe $75 Billion in Tariff Evasion as Economist Warns of Higher Prices
3 articles · Updated · WILX · Aug 14
Summary
Invoice-by-invoice AI audits at U.S. borders are the next step in the White House crackdown on transshipping, in which goods are routed through third countries to hide their true origin and dodge tariffs.
About 40 countries are tied to those rerouting networks, and officials suspect some Chinese-made goods are being relabeled as Mexican to exploit trade agreements as U.S.-Mexico trade has surged.
Oren Ziv of Michigan State University said the fraud often hinges on subtle “rules of origin” claims about where value was added, making it difficult for standard detection tools to catch.
Ziv said tighter enforcement may protect tariff revenue but still raise prices for consumers and manufacturers, whose global supply chains can leave them paying more for imported inputs.
The broader trade debate remains murky: the U.S. trade deficit stands at $371 billion this year, which Ziv said has historically often coincided with a stronger domestic economy.