Let’s Talk Tariffs with Jamie Rodgers: The PAIL Act, 100% Drone Tariffs & Canada’s Response

Your weekly coffee chat on tariffs & trade.

There are weeks in trade when one story clearly takes the spotlight.

This was not one of those weeks.

We had a new trade enforcement bill pass the House, Section 232 tariffs of up to 100% take effect on certain imported drones, and Canada’s retaliatory tariffs officially hit U.S. goods. Apparently September had no interest in easing us into things.

But the story that caught my attention most was the PAIL Act.

Not because it changes anything for importers today. It still has to make its way through the Senate. But if it becomes law, it would signal something I think every importer should be paying attention to: trade enforcement is getting more serious.

Let’s get into it.

What Caught My Eye

The House unanimously passed the Protecting American Industry and Labor from International Trade Crimes Act, or PAIL Act. The legislation would create a new DOJ task force focused on investigating trade-related fraud and could bring criminal enforcement into conduct that has traditionally been handled through CBP’s administrative processes. The bill has passed the House but has not yet become law.

For importers, I think the broader message matters just as much as the legislation itself.

Customs compliance is becoming a much bigger business risk.

Classification, valuation, country of origin and duty treatment have always mattered. But when duty rates climb, the financial incentive to get creative climbs with them. So does the government’s interest in making sure companies don’t.

After decades of working in customs, we’ve seen this pattern before: higher duties tend to bring greater scrutiny.

That doesn’t mean importers should suddenly be afraid of every entry they file. It means this is a good time to make sure the decisions behind those entries are defensible.

“That’s how we’ve always done it” has never been my favorite customs strategy.

It’s an even worse one when enforcement is increasing.

Here’s My Take

The new drone tariffs reinforce the same point from another direction.

Certain imported drones are now subject to Section 232 duties of 25% or 100%, with lower treatment available for qualifying products from certain countries.

At 100%, customs stops being a small line item.

Origin, classification and sourcing decisions can suddenly determine whether the economics of an entire product still work.

And I wouldn’t look at this as just a drone-industry story.

We’ve spent more than 75 years helping companies navigate changes in trade policy, and one thing remains consistent: something considered a “customs issue” can become a CEO or CFO issue very quickly when enough dollars are attached to it.

The higher the tariff, the less room there is for assumptions.

If I were importing products affected by any of these newer tariff programs, I’d want to know not only that my entries are compliant, but why we reached each classification, valuation and origin determination.

That distinction matters.

If It Were My Business…

I’d be using this moment to pressure-test my customs program.

Can we support our classifications? Do we understand the origin of our goods beyond where they were shipped from? Are our valuation practices documented? Are we reviewing new tariff programs at the SKU level? And when something changes, who owns the process internally?

None of those questions are particularly exciting.

Neither is explaining a customs problem after the fact.

I’d rather do the boring work first.

The same thinking applies to Canada.

Canada’s counter-tariffs of 15%, 25% and 50% on $27.6 billion of U.S. imports took effect September 8, adding another layer of cost for companies operating across an already deeply integrated North American supply chain.

For businesses selling in both countries, I’d be modeling the impact in both directions now. This is no longer simply an import-cost conversation.

One for the Road

I’m watching what happens with the PAIL Act in the Senate.

Whether this particular bill becomes law or not, I think the direction is worth noting. Tariffs are higher, enforcement tools are evolving, and the consequences of getting customs decisions wrong are becoming more significant.

I’m also keeping an eye on Phase 3 of CBP’s CAPE portal as companies continue waiting for the next step in processing IEEPA refunds.

There will undoubtedly be another tariff headline by the time we talk next week.

What I’d pay attention to is everything happening underneath it.

See you next week.

Jamie Rodgers
CEO, J.M. Rodgers Co.