China carrying out customs fraud, trade expert says: ‘No doubt’

China may be out of ways to evade U.S. trade laws as President Donald Trump’s tariffs and border crackdowns come into effect. International trade expert Daniel Pickard believes Trump’s return to the Oval Office could bring an end to shady Chinese trade practices.

“What we have seen repeatedly with a lot of the Chinese products is that they choose not to pass along that duty, but they actually absorb that cost and keep their price the same in the United States in attempts to continue to buy market share,” Pickard told Fox Business. “I think what we’re going to see is that the Chinese are going to continue to attempt to absorb those duties and export their way out of economic doldrums.”

Pickard says that while there is a lack of consensus about the rate at which China’s economy is slowing, there is an agreement among experts like himself that it is “considerably cooling,” and the CCP sees exports as a way out.

U.S. President Donald Trump attends a bilateral meeting with China’s President Xi Jinping during the G20 leaders summit in Osaka, Japan, June 29, 2019.  (REUTERS/Kevin Lamarque/File Photo / Reuters)

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However, the CCP’s gravy train could come to a grinding halt thanks to Trump’s policies and calls for “increased enforcement,” Pickard says.

On Feb. 1, President Trump signed an executive order implementing an additional 10% tariff on Chinese imports, something he spoke about throughout his 2024 campaign.

“Chinese officials have failed to take the actions necessary to stem the flow of precursor chemicals to known criminal cartels and shut down money laundering by transnational criminal organizations,” the White House wrote, citing the flow of fentanyl and other “contraband drugs” into the US as a reason for the heightened tariffs.

The White House went on to slam previous administrations that “failed to fully leverage America’s economic position as a tool to secure our borders.” President Trump sees tariffs as not only a way of boosting U.S. manufacturers and the economy, but also to curb the flow of illegal drugs and to protect U.S. intellectual property.

“In response to China’s intellectual property theft, forced technology transfer, and other unreasonable behavior, President Trump acted with conviction to impose tariffs on imports from China, using that leverage to reach a historic bilateral economic agreement,” the White House added.

President Trump discusses how he handled China while in office during his interview on ‘Mornings with Maria.’ (Wang Gang/VCG via Getty Images/ Fox Business / Fox News)

Pickard told Fox Business that instances of Chinese customs fraud and trade crimes are not “anecdotal or isolated.” He asserted that “everybody who is involved in this space is aware of at least dozens, if not more, stories of Chinese importers being involved in customs fraud.”

“There is no doubt that there is massive customs fraud going on,” Pickard told Fox Business, explaining that the fraud can take various forms. Chinese goods could be mislabeled as other products or may be shipped to other countries that will remove its “made in China” indication.

“What we’re seeing over and over again are essentially transshipment issues where China is shipping product to Thailand or Malaysia or sometimes Canada or Mexico, and then someone in that country is removing the ‘made in China’ indication, indicating that it’s now ‘made in Thailand,’ and shipping it into the United States, and therefore avoiding the duties,” Pickard said.  

Trump says Xi Jinping, China’s president, knows where he stands when it comes to tariffs. (Ton Molina/Bloomberg via Getty Images / Getty Images)

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In response to a Fox Business request for comment, Customs and Border Patrol said that its “Trade Enforcement Operational Approach demonstrates how CBP is using all of its authorities to combat trade fraud.” CBP also vowed to “use all methods at its disposal—including increased bonding, enhanced targeting and inspection of high-risk imports, and swift and thorough review of allegations to ensure a fair and competitive trade environment.”

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Rep. Ashley Hinson, R-Ia., introduced legislation in December 2024 to hold China accountable for tariff evasion. The bill would establish a task force to handle trade-related crimes and require the attorney general to submit an annual report on the Justice Department’s efforts to tackle such crimes.

“By strengthening the Trump’s DOJ’s ability to detect and prosecute international trade crimes, my bipartisan bill will ensure that Communist China and other perpetrators are criminally liable for illicit activity and that penalties are enforced,” Rep. Hinson said when introducing the legislation.

When speaking to Fox Business, Rep. Hinson emphasized the need for legislation to give the Justice Department the “tools” to protect Americans from Chinese threats and bolster the U.S. economy.