Entry Errors Skewed Import Data of Steel Derivative Products, CBP Says
Responding to our question on Whirlpool's claims that U.S. import data shows its competitors are evading tariffs (see 2509150067), a CBP spokesperson told us that import data has recently been skewed by accidental overreporting of the quantity of goods imported, causing an erroneous spike in import volumes for affected goods.
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Whirlpool had cited average unit values of imports in its informal allegations to the Trump administration that appeared to show those values falling steeply occurring simultaneously with a jump in import volume, indicating, according to Whirlpool, that its competitors were artificially lowering import values to evade tariffs.
But the CBP spokesperson told us that "certain errors," including the overreporting of imported goods quantities, have "inadvertently skewed the per unit values in the import data." The spokesperson, who attached recent CBP guidance on Section 232 tariffs to their email response, said that CBP is working with the trade community to correct such errors and encouraged importers to review entry filings to "ensure accurate reporting and compliance,"
Tom Gould, CEO of Tom Gould Customs Consulting, said that it is entirely plausible that confusion over entry requirements for Section 232 steel derivative tariffs caused the import data to erroneously show a spike in the quantity of imported appliances alongside a drop in the reported values. Because CBP required that goods subject to these tariffs be input into ACE on two lines, he said, "it's possible that some brokers are reporting the quantity twice," once on each line.
Gould said that such an error would not be rejected in ACE because the CBP systems are "not up to speed" and are not correctly validating inputs. He also said that because the two lines for steel derivative products are not linked in the import data, it's possible that people analyzing the import values are "only looking at line one," the value of the steel in the product, and not both lines, which he said "would throw off the import value."
The accusation by Whirlpool that its competitors are manipulating the transfer prices of their products to avoid paying more in tariffs also is likely true, but not necessarily evidence of duty evasion, Gould said. "The paradigm has been shifted" for companies from a focus on reducing their tax burden to reducing their tariff burden, he said, which means that companies are now incentivized to eliminate costs from their production that they previously would have reported, thus reducing their transfer prices. Such a practice is in line with both IRS and CBP guidelines, he said.
Gould said that the Trump administration's focus on customs enforcement, coupled with the inaccurate import data, may cause "good guys to get caught up with the bad guys," as CBP has been "aggressively promoting" whistleblowing on suspected customs violations.