Tariffs are a core element of the second Trump Administration’s economic policy, and it has made clear that it views the False Claims Act (FCA) as an important tool to advance its efforts to target trade fraud, circumvention, and evasion. Life sciences companies engaged in cross-border trade would be wise to reevaluate existing tariff compliance schemes to avoid costly FCA enforcement actions.

In August 2025, the Trump Administration launched the Trade Fraud Task Force, a body designed to increase collaboration and data sharing among Department of Justice (DOJ) and Department of Homeland Security (DHS) components to target parties circumventing or evading tariffs imposed under various trade statutes. In its press release, DOJ encouraged private whistleblowers to refer potential FCA violations to the Department, as well as to utilize the qui tam provisions of the FCA to file lawsuits on behalf of the U.S. against companies committing tariff fraud.

In the context of trade, DOJ uses the FCA to pursue importers that make knowingly or recklessly false statements that enable the importer to avoid paying tariffs or customs duties. Life sciences and health care companies face increased vulnerability to trade-related FCA liability in three primary areas:

• Misclassification: The U.S. tariff system typically employs classification categories to determine the proper duty rate. Companies that misclassify pharmaceutical and medical device products – whether intentionally or merely recklessly – such that the goods end up in a lower or exempted category will be vulnerable to FCA actions.
• Country of origin determinations: With tariff rates currently varying significantly from country to country, improperly classifying a good as originating from a country with a lower duty rate risks costly FCA liability.
• Undervaluation: Because import duties are typically driven by the value of goods, companies alleged to have reduced applicable tariff rates by undervaluing goods will be at risk of FCA enforcement.

In 2025, DOJ announced a number of major settlements across industries ranging from wood flooring, to countertop products, to plastic resin, in trade-related FCA cases – including a $54.4 million settlement with the tungsten carbide distributor Ceratizit. The life sciences industry is certainly no stranger to FCA enforcement, but particularly with pharmaceutical and medical device products coming under tariff scrutiny, companies must remain vigilant of greater FCA and criminal enforcement stemming from trade-related fraud.