Tariff Watch: Cross-Border Compliance, Consumer Class Actions, and EAPA Pushback

In the latest Tariff Watch, the weekly series from J.M. Rodgers, exclusively for importers, supply chain leaders, and manufacturers, we’re reporting on both breaking news and some under-the-radar developments that haven’t received the headlines they deserve. Let’s take a look at these developments:

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What’s New

• A new effective date was established for Mexico’s Electronic Value Declaration: On June 18, regulatory authorities finalized a new effective date for the mandatory implementation of the Electronic Value Declaration in Mexico. This documentation overhaul changes how the customs value of goods is transmitted and verified for shipments crossing the U.S.-Mexico border.
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• Tariff-related consumer class actions are gaining momentum: Trade and retail legal experts warn importers of a significant uptick in lawsuits targeting businesses over how they disclose tariff-related price increases to consumers. Most cases filed so far involve the 10%-15% Section 122 global surcharge and how importers advertised price changes.
• A court blocked an enormous EAPA evasion duty: A federal court blocked an Enforce and Protect Act (EAPA) evasion action initiated by Customs and Border Protection (CBP) earlier this month. The court’s action is now saving importers from a staggering 519% duty rate. The ruling highlights increasing judicial willingness to scrutinize and push back against CBP’s more aggressive penalty calculations.

Who’s Impacted

This week’s developments are set to have a broad impact on the day-to-day business of moving and selling goods. Here’s who is affected:

• USMCA and cross-border shippers: Any company moving raw materials, components, or finished goods into Mexico will be directly impacted by the Electronic Value Declaration rollout. Failure to comply with the new data transmission standards could result in severe delays at the border.
• B2C retailers and e-commerce brands: The rise in consumer class actions creates a massive new liability footprint for direct-to-consumer brands. Retailers who have added “tariff surcharges” or dynamically adjusted pricing to absorb recent customs costs are squarely in the crosshairs of these lawsuits.
• Importers facing AD/CVD and EAPA scrutiny: The June 5 ruling blocking the 519% EAPA duty provides a glimmer of hope for importers operating in high-risk sectors (such as metals, wood products, and certain electronics) that frequently face aggressive antidumping and countervailing duty enforcement by CBP.

What We’re Seeing

Rather than waiting for enforcement actions to hit, proactive supply chain and compliance leaders are adjusting their strategies to navigate these developments:

• Businesses are overhauling their retail pricing disclosures. In response to the threat of consumer class actions, we are seeing legal and marketing teams collaborate closely to review how price increases are communicated. Many retailers are removing explicit “tariff fees” from their consumer-facing checkouts to avoid misleading pricing claims, opting instead to bake the costs directly into the base price of the goods.
• Shippers are upgrading their cross-border data systems: With the new effective date set for Mexico’s Electronic Value Declaration, logistics providers and importers are aggressively auditing their ERP and customs software to ensure they can transmit the required valuation data electronically without disrupting cross-border turnaround times.
• Importers may litigate EAPA findings more aggressively: Empowered by the recent court decision blocking CBP’s 519% duty assessment, we are hearing that some importers may be willing to file their own challenges to EAPA evasion findings in court, rather than immediately settling or absorbing the stiff penalties.

What We’re Monitoring

Here are the most important ongoing stories that we’re keeping a close eye on this week.

• The launch of CAPE Phase 2: We are just one week away from the June 29 launch of CAPE Phase 2, which will handle IEEPA tariff refunds and reconciliation, as well as AD/CVD entries. We are closely monitoring CBP’s technical readiness, as this phase is expected to process roughly 2.8 million entries and $28.7 billion in refunds.
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• The countdown to the Section 122 expiration: We continue to monitor the legislative calendar as the July 24 expiration date for the temporary Section 122 global surcharge approaches. With the tariffs currently surviving on appeal, the administration must either let them expire, seek a highly unlikely congressional extension, or attempt to transition them to a permanent footing under a different legal authority.
• The upcoming Brazil Section 301 comment deadline: We’ll be keeping our eyes on the submitted dockets to identify which agricultural and raw material sectors are lobbying for product exclusions ahead of the July 6 public hearing on the proposed 25% Section 301 tariffs on Brazil.

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Sources

• New Effective Date Established for the Electronic Value Declaration in Mexico, Holland & Knight
• Tariff Consumer Class Actions: What Businesses Need to Know, Holland & Knight
• A Court Just Blocked An EAPA Evasion Action Over A 519% Duty Rate, Mondaq