Why Blanket Tariffs Create Higher Compliance Risk for Importers

What Are Blanket Tariffs and Why Do Governments Impose Them?

In trade terms, a blanket tariff refers to a sweeping duty applied across a wide category of goods, a particular country’s exports, or in some cases most inbound merchandise. Instead of targeting a narrow subset of products, policymakers impose a flat or broadly applicable rate across numerous tariff lines.

Governments typically justify these measures as tools for economic leverage, domestic industry protection, or geopolitical response. The attraction here is speed and visibility. A comprehensive tariff sends a clear signal and produces immediate fiscal impact.

Whether blanket tariffs achieve their intended macroeconomic objectives is still debated. Analysts disagree. Results vary by sector. From a compliance standpoint, however, the operational strain is hard to ignore.

When a uniform duty affects thousands of SKUs at once, every classification call carries more weight. A minor interpretive difference that once had limited cost impact can suddenly alter exposure in a meaningful way.

How Blanket Tariffs Increase Classification Errors

Classification errors rarely come from a single big mistake. They come from volume, ambiguity, and rushed change control.

When a targeted duty applies to a narrow product set, classification decisions tend to be deliberate. The stakes are obvious, the products are specific, and the HTS code research is focused. Blanket tariffs flip that dynamic. Because the measure sweeps across an entire chapter or heading, importers may assume they already know whether their product is covered. That assumption is dangerous.

Consider the Section 301 tariffs. Researchers at the Peterson Institute for International Economics found that the tariff lists themselves contained overlapping product descriptions, ambiguous exclusion language, and frequent regulatory updates that created persistent uncertainty even among experienced compliance professionals.

The classification error rate goes up not because people are being careless, but because the volume and ambiguity of coverage decisions simply exceeds the capacity of manual review.

The Impact on HTS Codes and Product Categorization

The Harmonized Tariff Schedule is a living document, but it was not built for the pace of change that modern trade policy demands. When a blanket tariff lands, it triggers a cascade of recategorization pressure across product lines that may share physical characteristics but belong in different HTS chapters. Electronic components, industrial chemicals and intermediate manufactured goods are particularly vulnerable because they often straddle classification boundaries.

The US International Trade Commission has documented cases where importers filed for reclassification in response to tariff changes, only to face CBP rulings that contradicted earlier binding guidance. An incorrect HTS code on a commercial invoice is the starting point for underpayment of duties, which is exactly what CBP auditors look for. Getting the code right the first time, under a moving regulatory target, is one of the most underestimated challenges in modern import compliance.

Country of Origin Risks and Transshipment Exposure

Blanket tariffs tied to origin, like those targeting goods produced in China or Russia, create a secondary compliance risk that can be even more difficult to manage: country of origin fraud and inadvertent transhipment exposure.

The allure of routing goods through a third country to obscure their origin is not a new problem, but it has intensified significantly since 2018. Customs agencies worldwide have responded. CBP ramped up enforcement actions under the Enforce and Protect Act, and the volume of Withhold Release Orders tied to forced labor and origin manipulation has climbed steadily since 2020. The risk for legitimate importers is that their suppliers, without disclosure, may be sourcing components or subassemblies from sanctioned or high-tariff origins. In those scenarios, the importer bears the compliance liability even when the violation originated several tiers up the supply chain.

Customs Valuation Scrutiny Under Broad Tariff Policies

When tariffs rise sharply, so does the financial incentive to undervalue goods. CBP knows this. Every time a major blanket tariff has been implemented, customs valuation audits have followed at higher rates, and the agency has been explicit about this connection in its trade enforcement priorities.

The World Customs Organization has noted that broad tariff measures consistently precede increases in valuation disputes, particularly around related-party transactions, assists, and royalties that should be included in dutiable value. An importer who has always calculated transaction value in the same way may suddenly find that method under scrutiny because the duty stakes have risen and CBP's tolerance for gray-area approaches has narrowed accordingly. Transfer pricing arrangements between affiliated entities become especially sensitive. First sale valuation elections require fresh documentation. Freight and insurance allocations that were once routine become audit targets.

This is not about bad actors. It is about the fact that valuation methodology that was adequate at a 3 percent duty rate draws a very different level of scrutiny at 25 percent.

How Blanket Tariffs Trigger Audit and Investigation Risk

The audit pipeline at CBP is not unlimited, but it is increasingly sophisticated. The agency's Automated Targeting System and the Centers of Excellence and Expertise have materially improved CBP's ability to identify statistical anomalies in entry data, particularly where duty payment patterns diverge from expected outcomes under a new tariff regime.

Academic research on post-importation audit risk has found that the period immediately following a major tariff announcement is when classification and valuation errors are most concentrated, because importers are adapting on the fly and their documentation is often incomplete. That window of adaptation is exactly when CBP tends to focus enforcement resources, because enforcement has the highest yield when errors are freshest and documentation trails are thinnest.

An audit does not have to result in a penalty to be costly. The staff time, legal fees and operational disruption of responding to a CBP Request for Information or a CF-28 can run into six figures for a mid-sized importer. And if the audit reveals a pattern of errors rather than an isolated incident, the liability exposure expands exponentially under prior disclosure rules.

Is your organization confident that its classification and valuation documentation would hold up to a CBP audit conducted today, under the current tariff landscape?

The Role of AI in Reducing Tariff and Compliance Risk

The compliance challenge posed by blanket tariffs is fundamentally an information management problem. The regulatory data is available. The correct classifications are knowable. The issue is that the volume of updates, the complexity of product-to-code mapping, and the speed of policy change have outpaced what human teams working with static tools can reasonably absorb.

This is where AI-driven compliance tools offer something genuinely different. Rather than relying on periodic manual review of tariff schedules, an AI-assisted approach can continuously cross-reference product descriptions against current HTS chapters, flag potential reclassification needs when tariff measures change, and model duty exposure across multiple origin scenarios before a purchase order is even placed.

The technology does not replace experienced compliance professionals, but it does give them leverage. A broker who once spent three hours researching whether a single product falls under a Section 301 list can use that time on the judgment calls that actually require human expertise.

Conclusion

Blanket tariffs are a permanent fixture of the modern trade environment. The political and economic forces that make them attractive to governments are not going away, and the pace of change is almost certainly going to accelerate rather than moderate. For importers and their brokers, the window for treating tariff compliance as a back-office administrative function has closed.

The risk is structural. It lives in the gap between the breadth of policy measures and the precision that import compliance requires. It accumulates in classification decisions made under pressure, in supply chains whose origin profiles have quietly shifted, in valuation methodologies that were designed for a lower-stakes environment. And it surfaces in audits, penalties, and delayed shipments at the worst possible moments.

FAQ

What is a blanket tariff, and how does it differ from a standard import duty?

A standard import duty is typically product-specific and based on HTS classifications established through multilateral negotiation. A blanket tariff, by contrast, is a broad measure applied across a category of goods, a sector, or a country of origin, often through executive action and outside the normal WTO-negotiated schedule. Because blanket tariffs cover large product sets with a single policy instrument, they create more classification ambiguity and more compliance risk than targeted duties.

Why do blanket tariffs increase the risk of classification errors?

The breadth of coverage under a blanket tariff means that many product types fall into gray areas near the edges of the covered categories. Importers and brokers working from existing classification practices may not review every product against new tariff measures, and the volume of covered HTS headings can make comprehensive review difficult without dedicated tools. The result is that classification decisions made by analogy or habit, rather than fresh analysis, become significantly more common.

How does country of origin become a higher-risk issue under blanket tariffs?

Origin-based blanket tariffs create a financial incentive for supply chain rerouting, which means that even legitimate importers can inadvertently receive goods whose true origin has been obscured by upstream suppliers. Substantial transformation rules are complex and fact-specific, and CBP enforcement around transhipment and origin fraud has intensified significantly since 2018. Importers need robust supply chain visibility and documented origin verification to manage this risk effectively.

What should importers do immediately when a new blanket tariff is announced?

The highest-priority actions are a classification review of all affected product lines against the new measure, a supply chain origin audit for goods sourced from covered countries or through high-risk transit hubs, and a valuation documentation review to ensure that the basis for declared transaction value is defensible at the new duty rate. Engaging trade counsel on exclusion petition opportunities, where applicable, should also begin as early as possible given the time-sensitive nature of exclusion processes.