Cargo Circumvention Tax Bill: A New Law to Tackle Smuggling

On May 13, 2025, a new bill was introduced in the United States House of Representatives (HR 3363 IH) aiming to combat cargo circumvention by imposing a tax on smuggled goods. The Cargo Circumvention Tax Bill seeks to address the growing issue of contraband being transported into the United States through Canada or Mexico.

Key Provisions of the Bill

The bill proposes a new tax on United States-bound circumvented cargo, which is defined as goods discharged from an ocean-going vessel in Canada or Mexico and then entering the United States by rail, highway, airport, or inland port. The tax rate would be 0.1256% of the cargo’s value, determined under U.S. customs laws.

The importer of the cargo would be responsible for paying the tax.
The tax would be imposed at the time of entry into the United States.
The Secretary of the Treasury would issue regulations or guidance to carry out the purposes of this section, including procedures for collecting the tax and penalties for non-compliance.

Key Definitions in the Bill

The bill defines “United States-bound circumvented cargo” as goods that are discharged from an ocean-going vessel in Canada or Mexico and then enter the United States through one of the specified routes. This definition includes intact inter-modal cargo or cargo that is modified, assembled, or consolidated in Canada or Mexico.

Effective Date and Next Steps

The amendments made by this section would apply to cargo entering the United States after December 31, 2025. The public will be able to track the progress of this bill and its potential impact on cargo smuggling once it is enacted into law.