Lawyer: Importers Should Consider Hedging Strategies Amid Uncertainties Over IEEPA Tariff Lawsuits

"We'll find out how this all pans out. But for right now, if you want to be safe and not sorry, get ACE, monitor liquidations, file a protective protest and ask for AFR [application for further review] to get this to stall out as long as possible until the pendency of litigation," Diaz said, adding that it would be helpful if CBP could indicate how importers can protect themselves and what actions CBP might take regarding reimbursement should the lawsuit go in favor of the importers.

Reviewing their liquidations via the reports they receive from ACE also is helpful if the importer uses multiple customs brokers to file entries, Diaz said.

"Most importers work with more than one broker, so if you don't have your own ACE account, you're dependent upon that broker to provide you data for their entries, but they wouldn't have data for other brokers' entries that are filed," Diaz said.

Protecting the importers' interests in this trade environment is key because, as the White House prioritizes and beefs up trade enforcement to protect U.S. interests, what's happening now is that importers are getting more alerts of non-compliance instead of requests for more information before Customs officially takes action, according to Diaz.

"We're seeing more of Customs either taking action or leading straight to letters of investigation and getting straight into enforcement, or not sending the requests for information and straight rejecting the shipments," Diaz said. These observations also came from talking with others in the trade at a recent conference, according to Diaz.

"Basically, Customs is using its administrative tools to proactively enforce immediately, versus retroactively, versus letting trade flow and facilitating the importations and then reviewing the importations," she continued.

As the trade awaits the outcomes of the importers' lawsuits against the IEEPA tariffs, importers should undertake a number of measures to ensure compliance, she said.

Importers should monitor their bond coverage since there have been reports that CBP has been issuing bond insufficiency notices amid the higher tariffs, according to Diaz. Another possibility is to consider segregating potential liability by getting a separate bond for something like antidumping coverage.

"So, checking out your bond amount and knowing when your bond time frame begins and ends, and proactively looking at your next 12 months, I think is a really smart thing to do right now, given higher tariffs in place for everyone," Diaz said.

Another measure is taking reasonable care and ensuring the origin of goods, particularly as many in the trade are still unclear about how CBP will determine whether an item has been transshipped to evade tariffs (see 2507310003).

The latest reciprocal tariff order said that any good that CBP determines is transshipped will be subject to a 40% tariff rate on top of the most-favored nation tariff rate (see 2507310081).

"My hope was that CBP was going to say, 'here is the actual definition of transshipping. Here is what we mean.' But the wording that we have for that one sentence is, 'goods determined by CBP to have been transshipped,'" Diaz said. "What I'm unpacking from this is we're not changing the definition -- and this is my hope -- we're saying if you are purposefully origin-washing ... you're going to be screwed with an additional 40% duties."

She continued, "The bigger fear that I've heard is, what if there's a percentage of Chinese content, for example, and you are transforming that in another country. Are we changing the definition of substantial transformation? Are we changing definitions of rules of origin? Are we changing the rules of the game? And that's where we have 10 lawyers lined up, and we're all going to argue over this. ... My problem is, it's goods determined by CBP. How is CBP making this determination? Is CBP going to start treating this more like a forced labor evaluation -- I want to know all your raw materials, so now everything's going to be a new origin verification, and I want you to show me where all your raw materials are from."

For now, importers should ensure that they are providing accurate valuation, country of origin and classification, Diaz said. She outlined additional potential methods for due diligence in the podcast.

"The caveat is, everything changes every second, so this is good today. Tomorrow, I don't know," Diaz said. "This is where I urge every importer to ensure you've got a rock star team around you to ensure you've got trade counsel you can rely on, to ensure you love your broker and they're providing you great Intel," in addition to following CSMS messages and executive orders.