Heightened Trade Enforcement Requires Pivot to New Communication Channels, AI Tools: Consultant

"Our new model is we have to have a plan and a strategy to deal not with the change itself, but with the fact that there are changes," said Allen, head of consultancy firm Trade Force Multiplier.

Allen laid out several strategies that importers can pursue in that time period, starting when President Donald Trump first tweets a tariff change on Truth Social to when agencies send out details via a Federal Register notice and CSMS messages on how to actually implement that tariff change.

One strategy is communication, according to Allen. "I know some companies who, when a Truth Social post comes out, they have a list of people that they send proactive information to: the CFO, the CEO, the COO. 'Hey, this is not just a reminder. This came out. We're watching it. We have a plan. We don't have the details yet. We don't know if this is going to happen, just a little reminder,'" Allen said. "They do that with everyone because it's proactive. And then you start training your executives to think that way."

Since all countries are on the table for possible changes in tariff rates, a lot of decisions on where to place manufacturing and suppliers are outside the tariff realm, Allen continued. As a result, importers need to start thinking about what other costs might be deciding factors when crafting a response to rising tariff rates, Allen said.

"We need to know for forward planning purposes. Again, we can't plan for all these variables -- and there are a lot of variables -- but what we can plan for is change," Allen said. "How do we build change into the financial processes? How do we build change into our supply chains? How do we build change into all of that? Because there's going to have to be a parameter for all of those things now, where before, we could actually have a plan, and it could be pretty precise. We don't have that anymore."

However, trade compliance costs are rising in addition to duty increases, according to Allen. That's because compliance has become more onerous.

"Trade is much more expensive, not just because of the duties, but because every trade professional that touches your shipments now has to spend more time," Allen said. "One of the reasons is because ACE didn't actually program edit checks for Section 232, Section 301 and all those stacking [duties]. They just didn't program it. So that means all of the individual systems that your brokers use [will] have to try to program it, and they can't test it with Customs." This is resulting in a lot of trial and error among brokers, she continued.

In addition to needing to be nimble in responding to tariff-related changes, importers also need to be equipped to handle CBP's efforts to double down on enforcement, which have been spurred on by the White House's focus on enforcement over trade facilitation and CBP's adoption of AI analysis tools, according to Allen. For instance, there have been AI tools that have been developed and that CBP has adopted that allow supply chain visibility all the way down to the origin of the materials.

The AI tools have also been informed by data submitted to ACE and the Global Business Identifier, as well as historical data that CBP receives related to forced labor holds, audits and international trade actions. All of this can be used as leverage, according to Allen, and what may result is an increase in requests for information, or CF-28s.

"What Customs has done is, they know the answer already. They know the answer, so they're using that for enforcement. ... They are using these tools beyond what you're thinking today," Allen said.

This data and its manipulation through AI tools also is enabling federal officials to engage in progressive entry, which involves seeking data all the way back to origin and then making it available as the product is manufactured. This allows federal officials to engage in non-traditional tariff actions, she said.

"These deals made with specific companies or specific industries -- this automotive duty offset: When I read that, I was like, my mind was blown," Allen said. "I've been doing this for almost 40 years. I'm like, 'How in the world is that going to happen? How are we going to implement that?' Then the language, [on] the heavy-duty truck [duty], came out, and I was even more flabbergasted -- 'oh, you have to go to the secretary of treasury and [make] an application, and then you have to get approval, and then they're going to tell you how much offset you can get, and then you have to tell your customs broker how to apply that. And then Customs is going to have to know that.' It's crazy. ... I think that that's going to be the next big area that consultants like me are going to be focusing on."

Because the federal government is using AI for trade enforcement, companies also need to use viability tools so that they can map their data and see where their pain points are, Allen said. From there, companies can explain to company officials, stakeholders and the government how these trade actions are affecting them.

"You are the chief storyteller for trade. This is very important," Allen said. Ultimately, "it does not matter what your strategy is. It does not matter how much information you know. It doesn't matter what duty rates are and how it works if you can't tell that story and connect with your audience."