Tariff-Fraud Crackdowns to Surge 200% Amid Growing Compliance Scrutiny

Trade expert Rennie Alston predicts a 200% surge in tariff-fraud crackdowns as regulators double down on ensuring tariff payments are made. Alston, CEO of customs consultant Alston Group, notes that the increasing number of tariffs imposed by the Trump administration has led to a level of compliance scrutiny from the U.S. Department of Justice not seen before. He anticipates increased penalties for circumvention of tariffs, valuation, and record-keeping infractions.

Zimmer Biomet, a leading medical technology company, has revised its forecast for the impact of tariffs on its operating profit for the current year. The company now expects a $40 million hit, down from a previous estimate of $60 million to $80 million [1]. This adjustment reflects Zimmer's efforts to mitigate the impact of tariffs and lower tariff rates than initially expected.

Zimmer's knee and hip segments showed modest rebounds in the second quarter. Knee sales increased by 3.1% year over year to $826 million, while hip sales grew by 5.8% to $536.1 million [1]. The company's CEO, Ivan Tornos, expressed optimism about the growth trajectory in the U.S. market, attributing it to new product introductions and technological advancements.

Meanwhile, the U.S. Department of Justice (DOJ) and U.S. Customs and Border Protection (CBP) are intensifying their crackdown on tariff evasion. The DOJ has prioritized exposing and prosecuting tariff evasion schemes, targeting importers, customs brokers, and other companies [2]. Trade expert Rennie Alston predicts a 200% surge in tariff-fraud crackdowns as regulators double down on ensuring tariff payments are made.

Companies must prioritize compliance with tariff regulations to avoid potential penalties. The DOJ has indicated that it will pursue criminal enforcement under the False Claims Act, which can result in substantial fines and prison time [2]. Alston notes that the increasing number of tariffs imposed by the Trump administration has led to a heightened level of compliance scrutiny.

Zimmer's adjusted earnings per share (EPS) guidance now ranges from $8.10 to $8.30, up from $7.90 to $8.10, reflecting the lower tariff impact and strong segment performance [1]. The company's revenue guidance has also been narrowed to a range of 6.7% to 7.7%.

References:
[1] https://www.medtechdive.com/news/zimmer-is-latest-medtech-firm-to-lower-expected-tariff-hit/757066/
[2] https://www.jdsupra.com/legalnews/10-key-facts-about-the-doj-s-crackdown-8890175/