CHANDLER, Ariz. -- As President Donald Trump’s tariffs and his related trade rhetoric prompt a trade war, the potential for cyberattacks within the U.S. trade industry could increase, according to a panelist speaking at the National Customs Brokers & Forwarders Association of America’s annual meeting.
China will "look at this as a no-holds-barred conflict,” Mike Brown, president and CEO of Avalon Risk Management, a surety, said during an April 8 panel discussion. “I can certainly envision state actors like the Chinese government launching cyberattacks on this sector. It’s always been a target sector, [along with] energy, healthcare and transportation. And so I think cyber insurance is a big deal.”
Companies subject to a ransomware attack may think that they can just pay the ransom to get their data back, but “that may not be what these guys want right now. They want to just be disruptors,” Brown said.
At the session, Brown and Ralph De La Rosa, NCBFAA customs committee vice chair and president of Imperial Freight Brokers, discussed other potential dangers brokers could encounter amid an increase in the breadth and depth of tariffs.
Brokers' clients could go out of business, and not pay any duties or fees owed to their broker. Brown asked, "Even if you're getting the duties up front, are you okay with absorbing a loss of a big client who owes you a bunch of entry fees?"
Brokers should consider purchasing credit insurance to hedge against importer clients who may potentially go out of business if these tariffs stay in place, Brown said.
“So, credit insurance can really save you. It also tends to give you a heads up when somebody’s going through" business difficulties "because the credit insurer will tell you, hey, we’re going to have to reduce credit for this company because they’re having problems [with] paying their rent overseas and [their] phone bill and things like that.”
Brokers may also potentially encounter bad actor importers, according to Brown.
These bad actor importers may act like “shell companies,” where importers incorporate as entities with the IRS, but then they disappear once CBP conducts intensive exams of the company, according to Brown.
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