AS DONALD TRUMP ramps up tariffs, he is causing turmoil in financial markets. But for a motley group of American manufacturers, the worry is that he may not be going far enough. Specifically, they welcome Mr Trump’s crusade to redraw the rules of international trade but know from experience just how porous tariffs can be. What is needed, they say, is much stricter enforcement at the border to prevent foreign companies from dodging levies.

They have come together as an informal alliance to influence policy. None of the companies is a household name, and they make a variety of products, from auto parts to furniture and pipes to coat hangers. Over the past couple of decades they, like many others in America, have seen their market shares shrink as China has risen as a manufacturing power. And they have lost not just revenue but also faith in the system set up to defend their interests: in multiple cases they have won official decisions against foreign competitors over unfair trade practices, only to see their competitors find novel ways to undercut them.

For some these problems became evident during Mr Trump’s first term, when he first erected a tariff wall against imports from China. David Rashid, chairman of Plews and Edelmann, an auto-parts maker, had assumed the tariffs would bring relief. But he soon discovered that one of his main competitors, a Chinese firm called Qingdao Sunsong, was selling its wares for the same price in America as before the imposition of a 25% tariff. After a detailed investigation, Mr Rashid alleged that Sunsong was committing trade fraud by routing its shipments through Thailand and slapping made-in-Thailand labels on them. “We built an airtight case,” says Mr Rashid. But Sunsong continues its business in America largely unimpeded.

Other manufacturers have had similar experiences. America’s kitchen-cabinet industry won a trade case in 2020 at the United States International Trade Commission, a federal agency, which imposed duties of as much as 260% on Chinese producers. Five years on, cabinet imports from China are well down. But cabinet imports from other countries have gone well above what China used to export. “Instead of stopping, China adapted and evaded the duties by funnelling their products through Vietnam, Malaysia, Cambodia and Indonesia, and the list goes on,” says Betsy Natz of the Kitchen Cabinet Manufacturers Association. “Once you get the decision, you think you’ve won. But you haven’t.”

In the meantime, the expenses for American companies can add up. Brad Muller of Charlotte Pipe and Foundry, a pipe maker, reckons that his firm and its peers have spent more than $6m over the past few years on antidumping cases and petitions over the evasion of duties. But this has been like trying to stop water with a sieve: Chinese pipe makers have used networks of shell companies in southeast Asia to bring their products to America. “Despite good-faith efforts of customs officials, they have been unable to stop these illegal trade flows,” says Mr Muller.

These companies, and a handful of others, have joined forces with the Coalition for a Prosperous America, a pro-tariff group, to lobby for more action from lawmakers. The good news for them is that they are finding a sympathetic audience in Washington—and not just in the Trump administration. A bipartisan committee in the House of Representatives created in 2023 to focus on threats from the Chinese Communist Party has taken up their cause with vigour. This has given momentum to two separate bills in Congress that would strengthen border enforcement. One would create a task force in the Department of Justice to focus on trade-related crime. Another would focus on the demand side, stripping the right to import from people proven to have engaged in fraud.

Given how patchy tariffs have been, it is only fair to ask whether a new task force or extra funding would make much difference. Andrew Boutros, a former federal prosecutor who focused on fraud, notes that the dual threat of much stiffer penalties and enhanced enforcement can bring about changes. “The government can create incentives for companies to do their own investigations, to self-report and to get resolutions,” he says. “The work can be outsourced, as is common in other white-collar enforcement areas.”

There is an irony in the pro-tariff crusade. Investors are clearly worried about the economic impact of tariffs. But Americans have not even seen the full effect of the more limited tariffs currently in place: there are simply too many gaps at the border, rendering them less effective at protecting producers but also less harmful for consumers. If the trade hawks get their way and enforcement improves, many Americans may come to rue their success. ■

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