The imposition of a large number of tariffs affecting Canada, as well as many countries around the world, is at the heart of the Trump administration’s economic policy. Tariffs require businesses to be able to accurately determine the origin of products, their components and raw materials, while also ensuring the correct customs classification and determining the applicable duties and tariffs.

What many businesses fail to realize—or simply underestimate—is that, given the strategic importance and priority of this tariff policy, U.S. authorities have also strengthened the tools and remedies available to them to ensure the collection of these tariffs and to compel compliance from companies that wish to sell products in the United States. Even a simple good-faith mistake could result in serious consequences.

What are the main enforcement tools available to the U.S. administration, and what measures should Quebec businesses take to reduce their risks?

SOME ENFORCEMENT MEASURES

SMEs often believe they are sheltered from the most severe enforcement actions, including criminal fraud prosecutions, assuming that U.S. authorities are interested only in very large corporations and multinationals. However, in SMEs, senior management generally exercises direct control over sourcing, at least for strategic components or products manufactured by foreign subcontractors. After all, management would typically have negotiated those contracts.

It is difficult to claim good faith or ignorance of a scheme intended to reduce or avoid tariffs that now apply when you are the president, chief executive officer, or procurement director of an SME.

Of course, in the event of an error or inaccuracy regarding customs classification or the calculation of duties and tariffs—even if made in good faith—the duties and tariffs owed must still be paid. However, companies should also be mindful of penalties, which can increase significantly depending on the nature of the alleged violation.

Matters become even more serious when a company has acted negligently, engaged in wilful blindness, or, worse still, falsified documents or committed fraud. Civil and criminal proceedings are becoming increasingly common and may target not only the company itself, but also its executives and employees who participated in the conduct. In such circumstances, would you be prepared to travel to the United States?

It is important to know that a Trade Fraud Task Force has been established to coordinate enforcement efforts among Customs and Border Protection (CBP), the Department of Justice (DOJ), the Department of Homeland Security, and other agencies.

It should also be remembered that authorities have broad investigative powers in connection with both potential civil and criminal proceedings. They may, for example, require access to all documentation supporting a company’s representations regarding origin. They also have powers to detain or seize goods at the border and to prohibit future imports.

Businesses should also be aware that, among recent developments, the whistleblower regime has been strengthened. Since whistleblowers may be entitled to receive between 15% and 30% of the amounts recovered, it is not surprising that an increasing number of investigations originate from disclosures made by whistleblowers, often employees of the company itself.

All of these situations can result in direct and indirect costs amounting to millions of dollars, depending on the circumstances. These may include retroactive payments, penalties, investigation and legal fees, direct impacts on business relationships with customers, suppliers and subcontractors, reputational risk, potential changes to supply sources leading to production interruptions and suspension of exports to the United States, and excess inventory that must be redirected to other markets.

PRACTICAL RECOMMENDATIONS

1. Ensure compliance with origin requirements for all raw materials and components, as well as the rules applicable to the finished product itself. Businesses must also ensure that products are correctly classified and that applicable duties and tariffs are accurately calculated.
2. It is important to demonstrate that a rigorous and robust compliance and due diligence process has not only been implemented but is also kept up to date. Supply chains constantly evolve—from raw materials and components to manufacturing, processing, and final product labelling. Companies must be able to demonstrate their compliance process, show that they exercised due diligence, and cooperate fully with investigations.
3. Do not rely blindly on statements made by suppliers and subcontractors. Conduct audits and both regular and unannounced site visits. Request supporting documentation for their claims. What measures have they implemented themselves? Can they trace the sources within their own supply chains, or are they attempting to conceal them because the true source is a country subject to higher duties, tariffs, or other restrictions?
4. Simple transshipment is not sufficient. A clear distinction must be made between the country of shipment and the true country of origin. This is especially important because the Trump administration has often imposed measures targeting third countries, such as certain Southeast Asian nations, when goods are merely transshipped from China, for example.
5. Rules of origin for processed products vary by sector, but simple assembly will generally not be sufficient to change a product’s origin. A substantial transformation is usually required. Once again, a rigorous determination must be made and maintained.
6. Employee awareness and training regarding compliance are critical. A procurement employee who suddenly substitutes a component sourced from Mexico with one manufactured in Vietnam could make the finished product subject to duties and/or tariffs, depending on the significance of that component, whereas CUSMA/USMCA treatment might otherwise have applied. Such a situation can become a nightmare in the event of an audit.
7. Agreements with suppliers and subcontractors should include clauses guaranteeing the accuracy of information, documents, and representations relating to the origin of the products they provide.
8. It is also essential to retain historical documentation when changing suppliers or modifying products. Investigations and enforcement actions may arise years later, and companies must be able to demonstrate compliance specifically for the period under review.
9. Seek advice from customs specialists and, where uncertainty exists, obtain a legal opinion. Doing so may help demonstrate your good faith.
10. If there is uncertainty, consider requesting an advance ruling from CBP, ideally with the assistance of customs specialists and legal counsel.
11. If you discover a good-faith error, promptly consult legal advisors with expertise in customs matters to determine whether a voluntary disclosure should be made to the authorities. Taking the initiative and offering cooperation will not eliminate all consequences, but it may help avoid the most severe outcomes.

Conclusion

In the current environment, customs compliance is no longer merely an administrative matter—it has become a strategic risk management issue.

Our firm, in collaboration with our affiliated partners around the world, including in the United States, is well positioned to assist and advise you in the expansion of your international business activities.

© 2026

MICHELINE DESSUREAULT, LL.B. 
Lawyer and Trademark Agent 
micheline.dessureault@groupetcj.ca 
THERRIEN COUTURE JOLI-COEUR LLP - groupetcj.ca
International Affiliations
Lawyers Associated Worldwide / USLAW