2026 will be another turbulent year in trade

In 2025, many companies blunted the impact of tariffs with mitigation strategies. Unfortunately, tariff uncertainty is still going to be a major factor to contend with in 2026—and those same mitigation strategies may expose companies to federal scrutiny.

“We’re dealing with a fragmented, volatile, and highly unpredictable trading environment heading into 2026,” Mark Truchan, a partner in PwC’s customs and international trade practice, told reporters at the Big Four firm’s Tax Policy Outlook Media Breakfast. “And the biggest challenge isn’t just the tariffs themselves; it’s the uncertainty, and it’s making it really difficult for companies to effectively plan beyond the short term in this environment.”

SCOTUS won’t bring clarity: The Supreme Court may rule on the legality of the second Trump administration’s International Emergency Economic Powers Act (IEEPA) tariffs as soon as February 20. But don’t expect that to provide much clarity. The court may decide to uphold all the IEEPA tariffs, limit them, strike them all down, or uphold some and not others, and companies should plan for all those scenarios, PwC’s Washington National Tax Services group wrote in its 2026 Tax Policy Outlook.

And don’t expect the Trump administration to give up on tariffs. As Truchan noted, “the North Star for the administration continues to be higher tariffs and the threat of higher tariffs to drive the America First trade policy.” In the event that SCOTUS does invalidate the IEEPA tariffs, the executive branch will likely explore using other trade statutes to levy them, according to the Tax Policy Outlook.

Prepare for tariff mitigation measures to be audited. Companies have been “very aggressively implementing” tariff mitigation strategies, Truchan said, due to the massive savings they can engender. “They’re moving quick and they’re doing the math and they’re realizing that every month of delay is worth millions, if not tens of millions, of dollars,” he said.

But the administration has stepped up its enforcement of tariffs, so caution is warranted. The Department of Justice and Department of Homeland Security have implemented a Tariff Fraud Task Force, and the DOJ has indicated that tariff fraud will be its “second-largest white-collar crime focus,” the Tax Outlook stated. Companies are “experiencing a rise in inquiries focused on valuation, classification, country of origin tracing, and the operational integrity behind first-sale arrangements,” it said.

Companies need to perform due diligence on their tariff mitigation strategies, Truchan said, and “plan as if they’re going to be audited, because they likely will be audited in the near term.”

US Customs and Border Patrol is using “advanced data analytics to identify anomalies and better target companies for inquiries and for audits,” he warned, so organizations need to take care if they change tariff classifications or product origins. “They need to realize Customs is likely looking at those historical data trend changes in their own data patterns, and they need to plan accordingly, because they’re likely on Customs’ radar.”

The penalties for tariff evasion can be serious. In December 2025, for instance, “a North Carolina-based distributor of tungsten carbide products…agreed to pay $54.4 million to resolve allegations that it violated the False Claims Act by knowingly and improperly failing to pay duties owed on...products imported from China,” according to the DOJ. In a separate case, the COO of plastics company MGI International was charged with and pleaded guilty to conspiracy to smuggle goods into the US.