As President Donald Trump's tariffs on foreign imports have increased sharply, so have incentives for companies to find ways around them.

Shipping companies, many based in China, have reached out to U.S. firms that import apparel, auto parts, and jewelry, offering solutions to avoid the import taxes, The New York Times reported Tuesday.

The Chinese firms advertising these services describe their methods as valid solutions. But these practices are considered methods of customs fraud because the companies might be dodging tariffs by altering the information about the shipments that is given to the U.S. government to qualify for a lower tariff rate. Or they might use transshipment, moving goods to another country that is subject to a lower tariff before shipping them to the U.S.

These schemes are costing the U.S. government billions of dollars in tariff revenue annually, the Times reported, and leaving honest companies that pay tariffs deeply frustrated and worried about being left at a financial disadvantage to dishonest competitors.

"If nothing is done, those willing to cheat are going to continue to win the day here," said David Rashid, the executive chair of Plews and Edelmann, an automotive parts company that has appealed to the government to crack down on unfair trading practices by its competitors.

In February, Michael Granston, deputy assistant attorney general for the Department of Justice's Commercial Litigation Branch, reportedly said the Trump administration will seek to "aggressively" deploy the False Claims Act as a "powerful" enforcement mechanism against importers that take steps to evade customs duties, including the new tariffs.

The False Claims Act authorizes the government to seek not only any tariff underpayment but also three times the amount of underpayment and penalties for each instance of underpayment.

In April, Chinese exports to the U.S. fell 21% from a year earlier, but Chinese exports to Southeast Asian countries rose by the same percentage, the Times reported. Many of those Chinese goods were sent through Southeast Asia, but U.S. officials are increasingly focused on the role Mexico plays as a funnel for Chinese goods to the U.S.

An analysis by Exiger, a data analytics firm, found that more than 3,000 companies in Mexico depended on Chinese shipments for 75% or more of their supply chain, according to the Times. Many of those companies are subsidiaries of Chinese state-owned enterprises, and most sell products to the U.S., the report said.

Such shipping channels might help Chinese companies bypass tariffs as well as U.S. laws to fight forced labor in China or block trade with companies that pose national security threats, Exiger said.

Chinese companies are also marketing a method called "delivered duty paid" that reduces a U.S. importer's legal liability for tariff fraud. Typically, a U.S. company takes legal ownership of a product at a factory in China and is responsible for shipping it overseas and paying duties to the U.S. government when it comes into the country. But the Chinese company acts as the U.S. importer, retaining ownership over the good as it is shipped into the U.S. The Chinese company then pays U.S. customs fees before handing the good over to the U.S. company inside the U.S.

Christopher Carney, an auto industry executive who traveled to Washington, D.C., this year to urge Congress to do more to fight trade crime, told the Times that companies offering these schemes were operating with "a sense of impunity."

"It's a long way away, and nobody is that worried that the U.S. government is going to come to China and arrest them," he said.

Trish Driscoll, a spokeswoman for Customs and Border Protection, told the Times the department used enforcement tools, intelligence, and partnerships to fight tariff evasion, and, as a result of recent presidential actions, was now imposing the most severe penalties permitted by law. She said that from May 5 through May 9, CBP took in more than $630 million by reviewing more than 2,000 shipments detected for duty evasion.

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