As national security policy increasingly incorporates trade controls to advance foreign policy and strategic economic goals, companies face growing exposure to sanctions, export restrictions and customs enforcement. The picture is further complicated by new and continually changing tariffs and taxes on imports that can alter supply chain economics and commercial relationships. The second Donald Trump presidential administration (Trump 2.0) “has been more willing to use trade-related tools in novel ways, for example by announcing tariffs where financial sanctions would have been used historically,” Jonathan Cross, a partner at Herbert Smith Freehills Kramer, observed to the Anti-Corruption Report. What once might have rested safely in the land of sales and logistics now becomes an increasingly significant component of an organization’s compliance function.

As a result, many compliance professionals may find themselves needing to brush up on – or learn for the first time – the fundamentals of trade controls. To assist, the Anti-Corruption Report has created this multi-part primer to ensure all compliance experts have their basics covered. This first part clarifies the aspects of and differences between common trade controls, including sanctions, export controls, customs, tariffs and other measures. Future articles will dive into who is at risk, the changing enforcement environment and how companies should build compliance frameworks to manage trade control risks.

See “In-House Perspectives on Compliance’s Role in Managing New and Emerging Risks” (May 22, 2024).

Differentiating Trade Controls

Even as sanctions, export controls, tariffs and customs regulations are core trade controls, each functions differently and imposes different compliance obligations for companies involved in cross-border transactions.

Put simply, sanctions target specific countries, individuals, companies or sectors “for restrictions on financial dealings or general business engagement,” Cross explained. Export controls “regulate the export, re-export, and re-transfer of items or technologies controlled under U.S. law,” he said. Tariffs “involve the collection of a tax on importation of goods,” he continued. Customs regulations, “in addition to addressing tariff processes, determine whether goods can be imported into the U.S. at all.”

Sanctions

Sanctions are a means by which the U.S. government makes economic interactions with the rich U.S. economy difficult for specific entities, often to attempt behavior modification of the sanctioned entity.

Economic sanctions are “a foreign policy tool designed to deter certain behavior or penalize certain conduct,” Emerson Siegle, a partner at Ropes & Gray, told the Anti-Corruption Report. Pursuant to economic sanctions, “certain countries, geographic regions, entities or individuals are either off limits entirely or subject to significant restrictions,” he added.

Assets belonging to individuals or entities might be frozen, or “blocked,” in the parlance of the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC), which oversees economic and trade sanctions. This means that the property or interest in property may not be transferred and withdrawals from financial accounts may not take place.

For a deeper dive, see our three-part sanctions 101 series: “How Sanctions Regimes Work” (Aug. 3, 2022), “Their Impact on Private Fund Investors and Investments” (Aug. 17, 2022), and “How to Comply With Them” (Sep. 14, 2022).

Export Controls

Export controls, which often complement sanctions, are more focused on what is being transferred, where it is going, and how ultimately it will be used rather than on the people or entities involved in a transaction. Unlike sanctions, which bar or limit transactions with specific nations, companies or people, “export controls target the movement of controlled goods and technology outside the United States,” Jonathan Todd, a partner at Benesch, told the Anti-Corruption Report.

Rather than targeting dealings with particular entities or individuals, “export controls generally restrict the flow of sensitive goods and technology,” Siegle explained. In contrast to sanctions, they “apply to the item rather than to the person,” he said.

What Constitutes an Export

At a basic level, an export entails sending something outside of the U.S. “Sending a physical item abroad is a classic example of an export,” Siegle said.

The notion of an export extends well beyond physical shipments. Typically, exports include “any items, data or technology (including software) that leave the United States,” Amelia Schmidt, a partner at Kaiser, told the Anti-Corruption Report.

Export control rules distinguish between exports, in-country transfers and re-exports. “If that exported item is then sent to a different country, it is considered to be a re-export,” Siegle noted. “In contrast, if the exported item is sent to a different city within the same country, it is considered to be an in-country transfer,” he continued. Each of those actions, he explained, “may be separate export transactions that could require a separate authorization if the item is controlled.”

Varying Definitions

However, the term “export” itself is defined in both Commerce Department and State Department regulations, and there are variations in definition depending on which export regime applies, Cross observed.

Which regulations are applicable to an export depends on the nature of the item at issue. Commercial and “dual-use” exports (those that have both military and commercial uses) “are governed by the Export Administration Regulations,” or EAR, Schmidt said. In contrast, military exports are “governed by the International Traffic in Arms Regulations,” or ITAR, she noted.

Technology Transfers and Nonphysical Exports

Export controls can apply to technology transfers as well as to the communication of technical information. “Not just physical goods are exported,” Siegle emphasized. For example, “sending an email with an attachment could be an export,” he noted. Even a blueprint “showing how to build a controlled item will generally be deemed to be controlled ‘technology’ that can be exported in the same manner as the item itself,” he explained.

Under the EAR, the definition of “technology” is broad and includes “information necessary to develop, produce, use, operate, install, maintain, repair, overhaul or refurbish the controlled goods,” Siegle said.

Through these regulations, the U.S. government also regulates the production of items overseas that use U.S. technology and software, through the Foreign Direct Product (FDP rules,) Michael Huneke, a partner at Morgan Lewis, told the Anti-Corruption Report.

Exports Without Crossing a Border

An actual departure from the U.S. is not always necessary for export controls to apply, either. “Releasing any items, data or technology to a foreign person who is in the U.S.” is considered by the U.S. to be a “deemed export” to a foreigner, Schmidt explained.

The release of technology to a non-U.S. national can be a deemed export “even if the non-U.S. national and individual who released the technology are employees of the same company,” Siegle noted. “Depending on the controls applicable to the item or technology released, the company may need a license for that release,” he added.

Emerging Technologies and Policy Trends

Certain categories of technology, including semiconductors (which are used to make computer chips and power other systems and devices), AI, and quantum information science and technology (QIST) “are of core interest to the United States government,” Siegle said.

Export controls are “catching up to emerging technologies,” Siegle continued, and they address “both inbound and outbound trade,” he observed. It can be challenging to determine the right measure of control because the U.S. needs both to protect its national security interests while maintaining its economic competitiveness. “There is some sensitivity around controls, because the more controls put in place, the more protected U.S. technology is – but also the more restricted it is,” he explained. To that end, there is some “debate in policy circles about how much access should be restricted so that the U.S. can be a market leader.”

As an example, the Committee on Foreign Investment in the United States (CFIUS), an interagency committee chaired by the Treasury Department, reviews foreign investments and other transactions to assess their impact on national security. The focus of CFIUS national security reviews is foreign investment in the U.S., and transactions involving U.S. companies that deal in sensitive technologies, Siegle said. Looking at the flow going in the opposite direction, the Treasury Department’s Outbound Investment Security Program “regulates investments by U.S. persons into China or Chinese-affiliated companies that deal in specific categories of technology, including semiconductors, quantum and AI technologies,” he observed.

“The U.S. government has been rolling out export controls to cover these technologies,” Siegle reported. Perhaps not surprisingly, given the U.S.’ relationship with China, “there are quite complicated export controls targeting the export of semiconductor equipment from China,” he added.

Multiple U.S. administrations have determined that controlling the export of emerging technologies like AI and semiconductors is “critical to the U.S. government’s ability to lead the development of AI models and applications that carry substantial national security implications,” Huneke said. Trump 2.0 has allowed the export of some AI chips to China on a “case-by-case basis” that included “know-your-customer (KYC) requirements and other controls designed to restrict the use of the items for military or intelligence purposes,” he observed.

See “How 2025 Changes to U.S. and Chinese Export Controls and Data Laws Impact Companies” (Jun. 19, 2024).

Customs and Tariffs

Shifting to the import side of a transaction, “customs regulations can be considered the inverse of export controls,” Siegle said, as they address the import of goods into the U.S.

Import Controls

Anyone who has ever flown into the U.S. knows that there are certain items that cannot cross the border freely, such as fruits and vegetables, meats and cheese, no matter how delicious. These regulations are meant to protect the country from diseases and invasive species. Other laws prevent the import of goods that may have been produced by slave labor or have other supply chain issues.

In June 2026, President Trump issued Executive Order 14411, which called for tightening of customs enforcement, including tightening up regulations around importers of record (IORs) and their reporting requirements.

Tariffs

In addition to controlling what is eligible to come into the U.S., the U.S. government has also imposed tariffs on most goods that are imported. Tariffs or duty fees “essentially are taxes on goods that are imported,” Siegle explained.

The classification of an item, its value and its country of origin generally “will yield the duty rate that must be paid,” Siegle said. “For example, if one has a $100 widget and the duty rate is 1 percent, then the duty that must be paid will be $1.”

A tariff might also raise an existing duty rate. If, for instance, “a tariff raises a duty rate from 1 percent to 25 percent, the amount of duty paid on importing a $100 widget will rise from $1 to $25,” Siegle explained.

An Expansive Approach to Tariffs

Trump 2.0 has been taking an expansive approach in using various trade mechanisms. “‘Trade controls’ are broadly asserted by the current administration to include essentially any controls on inbound or outbound trade or investment,” Huneke observed. President Trump’s interest in trade is a longstanding one. “The president has been publicly focused on trade imbalances going back to the late 1980s,” he said.

Trump’s use of trade controls “is not unique to the current administration,” Huneke noted. “These tools have been in the ‘toolkit’ for some time, including from the first Trump administration,” he continued. The difference now is that “everything is on the table,” he said.

In some measure, Trump 2.0 is merely expanding and building upon the foundations of prior administrations. Moving from the first Trump administration through the Biden administration into Trump 2.0, “most tariffs and trade controls have remained in place,” Neena Shenai, a partner at WilmerHale, noted. What is different, however, is the extent to which they are being deployed. “The use of a host of economic tools is not a new issue, but the pace and breadth of developments have accelerated significantly,” she said.

Supreme Court Reins Things In, but Only Slightly

Tariffs, of course, have been garnering a lot of headlines in recent years. Trump 2.0 “has been imposing tariffs at an unprecedented rate in a broad and assertive way,” Siegle said.

On the same day that the Supreme Court held that the International Emergency Economic Powers Act (IEEPA) does not authorize the president to impose tariffs, the White House asserted, in a fact sheet issued on February 20, 2026, that tariffs will continue to be used to protect U.S. workers, reshore domestic production, lower costs and raise wages.

See “How to Prepare for an Increase in Customs Whistleblowers” (Mar. 11, 2026).

Anti-Boycott Laws

Companies that conduct a significant amount of business in the Middle East should be aware of anti-boycott laws, as well, Schmidt suggested. These laws, “which the Commerce Department administers and enforces,” are “technically part of the EAR, but they restrict more than exports,” she continued.

“Anti-boycott laws essentially say that a U.S. company cannot engage in a boycott that is unsanctioned by the U.S. government,” Siegle said. “The primary boycott that is unsanctioned by the U.S. government is the Arab League’s boycott of Israel,” he added.

Anti-boycott laws “prohibit U.S. companies from doing anything to cooperate with foreign boycotts against U.S.-friendly countries,” Schmidt said. Although “regulations have been in place since the late 1970s,” she explained, “what they effectively mean for today is that U.S. companies may not cooperate with the Arab League’s boycott of Israel.”

That, of course, begs the question: What is cooperation in this context? It is often “complicated to assess what is or isn’t cooperation with the anti-Israel boycott, so U.S. companies operating in the Middle East especially need to be mindful of those regulations,” Schmidt said.

“There are rules addressing the types of contracts and proposals that a U.S. company cannot agree to, such as a contract that states that goods shall not be of Israeli origin,” Siegle explained. In some cases, he noted, “boycott requests can be subtler.”

In addition to possible penalties under the EAR, there is a “reporting requirement if an entity receives a boycott request,” Siegle added. “There are also separate IRS boycott reporting requirements,” he said, which means companies can “face tax penalties if they engage in impermissible boycotts.”

Patriot Act’s Material Support Provisions

The anti-terrorism laws and regulations can also come into play with regard to importing and exporting goods.

The Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (Patriot Act) Act of 2001 prohibits providing “material support” to terrorist organizations, including organizations the State Department designates as foreign terrorist organizations (FTOs). Trump 2.0 has designated a number of cartels and transnational criminal organizations (TCOs) as FTOs, which can further complicate the trade controls landscape. “While these often overlap with OFAC regulations – which, more often than not, result in civil rather than criminal penalties – it is a crime to violate the Patriot Act’s material-support provisions,” Schmidt noted.

See “How Designating TCOs As Terrorist Organizations Creates Risks for Financial Institutions and Beyond” (May 21, 2025).