March 7, 2025 Exemptions
Note: Canadian and Mexican goods released March 4-6 will be subject to the full 25% tariff.
March 7, 2025 Exemptions
Note: Canadian and Mexican energy products released March 4-6 will be subject to the full 10% tariff.
Removal of de minimis on products of China. Canada and Mexico is paused.
Chinese Exemptions end May 2, 2025
Additional varied reciprocal tariffs on select countries. Canada and Mexico exempt from reciprocal tariffs. 104% Tariff on China.
9 April, 2025
25% tariff on certain automobile parts (engines and engine parts, transmissions, powertrain parts and electrical components).
3 May, 2025
Tariffs are taxes or duties imposed by a government on goods and services imported into or exported out of a country. They are typically used to:
Types of Tariffs
Effects of Tariffs
Tariffs are a key component of trade policy and can significantly impact global and local economies.
Tariffs are ultimately paid by importers, but their cost often gets passed along the supply chain, impacting different groups:
Page Last Updated: 04/03/25
Fortunately, you are in good hands using Willson International, a licensed customs broker, in coordination with Roanoke, who can guide you through the many regulations set forth by U.S. Customs & Border Protection (CBP). As part of your obligations to CBP, you must provide CBP with a bond. We generally recommend that an importer filing multiple entries within a 12-month time frame obtain a continuous bond as part of its obligations to CBP. Understanding the continuous bond will help with financial planning along with corporate and shareholder risk assessment, particularly if you import goods subject to high duty rates.
According to CBP regulations, a customs bond is “…a contract which is given to ensure the performance of an obligation imposed by a law or regulation.” A Customs bond is a type of surety bond – a three-party contract. The parties involved in the bond contract are the principal (importer), the surety company and the obligee (CBP).
The primary purpose of a customs bond is to guarantee the payment of import duties, taxes and fees, as well as to assure compliance with all laws and regulations governing the entry of merchandise from foreign shipping points into the United States.
A customs bond is not insurance. With insurance, some losses are expected, and a portion of the premium is set aside to pay losses. With surety bonds, the surety assumes no losses will occur as the surety has subrogation rights against the bond principal. With a customs bond, each applicant is reviewed individually based on their financial condition and ability to pay, as well as the risk related to their importations. The surety has subrogation rights against the bond principal. Think of a bond like a bank loan, no surety would knowingly issue a bond for a principal likely to default.
For the surety to have the assurance that an importer can pay for any potential claims issued against the bond, from time to time, the surety may request a financial statement for consideration. If you are asked to submit a financial statement for underwriting review, please follow these guidelines:
Financial statements, while an important part of the underwriting process, are not the entire representation of the importer. Our underwriters review all importers on an individual basis. Credit reports, importing history, commodities imported and the customs broker(s) handling the importer’s entries also play an important role in the review. Roanoke and its sureties keep all financial statements strictly confidential and they are used only in the bond underwriting process. We do not provide this information to any third parties including the customs broker.
Underwriters will accept a financial statement from a related company if a General Indemnity Agreement (GIA) is signed by both the importer and the related company. The completion of the GIA depends upon the type of financial statement provided. For example, if a corporation submits its financial statements for review, the underwriters would require a corporate officer with legal binding authority to sign the indemnity agreement. If a limited liability company submits a financial statement, personal indemnity may be required depending upon the entity’s type of LLC.
Our underwriters will provide detailed instructions as to how to complete the GIA to make the process as simple as possible. We encourage all importers to review the language of the indemnity closely to understand its terms and conditions.
In the event the underwriters determine the risk of writing the bond is not supported by the financial condition of the importer, collateral is generally requested. Collateral is taken to protect the surety company of its interests when a bond cannot be approved due to the financial risk of the principal, bond type or commodity. Roanoke accepts collateral in the form of a standby letter of credit issued by a pre-approved U.S. bank.
When collateral is requested, the underwriters will provide the required letter of credit language that must be used by the bank. Should you decide to proceed with obtaining a letter of credit, it’s best to first provide the name and address of the bank you wish to use.
The underwriters will want to confirm the bank is financially stable to provide the letter of credit for an undetermined length of time. An originally signed GIA is also required to accompany the letter of credit. The GIA language should be read carefully to understand the surety’s terms and conditions. Collateral is typically not released until either:
We strongly encourage you to collaborate with Willson International, your customs broker when determining the amount of bond needed to avoid interruption to the importer’s business. Customs brokers are licensed by CBP and can guide you through the bond calculation process, as well as underwriting process to ensure you stay informed and compliant.
CBP sets the rules for determining bond amounts. Generally, the continuous import bond amount calculation is based on 10% of the total duties, taxes and fees (including antidumping/countervailing duties) paid OR payable in the last 12 months. Refer to CBP Directive 009 3510-005 and the Current Bond Formulas notice for specific information.
Although CBP looks to the last 12 months to calculate bond sufficiency, CBP runs sufficiency reviews every month. Projections of the next 12 months will need to be taken into consideration to avoid an insufficiency. An import bond can become quickly saturated or exhausted in less than 12 months preventing you from using the bond.
CBP’s Revenue Division Bond Team is tasked with ensuring the government is protected and so they monitor bond and issue demands for larger bonds when a bond is saturated.
Only 15 days are given to comply with CBP’s demand before they inactivate the bond. In some cases, CBP has identified bonds as “grossly insufficient” and immediately rendered the bond as insufficient and no entries could be filed against it. If underwriters determine they need further information to approve the bond, it is not guaranteed that the bond approval can be obtained in 15 days.
When a continuous bond is inactivated by CBP, your other option is to obtain single transaction bonds – a bond for every entry made into the U.S., which can cause its own underwriting risk to the surety company and added costs for you as these bonds are calculated on 100% of the goods plus any duties, taxes and fees (additional rules apply for goods subject to FDA and other partnering governmental agencies). Therefore, having your customs bond managed by Willson International is the best strategy.
You’re an importer with regular shipments from your overseas supplier, so your customs broker has filed an Activity Code 1 continuous bond as required by U.S. Customs & Border Protection to secure your entries. Now you’ve received a letter from CBP saying your bond is “insufficient to protect the revenue and insure compliance with Customs and Border Protection laws and regulations.”
Fortunately, as an importer, you can rely on Willson International, a licensed customs broker, in partnership with Roanoke, to expertly guide you through the complex regulations set by U.S. Customs & Border Protection (CBP).
It is CBP, not your customs broker or your surety, that dictates minimum bond amounts.
In determining sufficiency, CBP looks at your total Duties, Taxes, and Fees (DTF) over the past 12 months – not a calendar year or a bond term but a “rolling 12 months.” CBP’s basic policy is that your bond must equal not less than 10% of total DTF for a previous 12 month period. CBP always rounds up.
The minimum bond amount is $50,000. When the 12 month DTF is less than $1 million, the bond calculation will be in $10,000 increments. For example, if your DTF is $500,001, the minimum acceptable bond is $60,000. If your DTF is $600,001, the minimum acceptable bond is $70,000, and so forth.
If the DTF exceeds $1 million, CBP accepts bonds only in multiples of $100,000. For example, if your DTF is $1,000,001, CBP will require a minimum bond of $200,000. Delinquencies in payment of duty or in dealing with liquidated damage claims may result in CBP requiring higher bond amounts.
CBP’s demand is a minimum based on your DTF over the past 12 months. Sometimes there can be a notable increase to DTF in recent months. We see this frequently of late as a result of “special tariffs,” such as Section 301 duties on goods from China. When this happens, CBP’s minimum bond amount calculation will almost certainly be inadequate for the next 12 months.
You should calculate your bond needs based on your own projections of import activity over the next 12 months. The calculation should take into account tariff changes and other factors instead of anticipated increases in parts and materials requirements or planned expansion of the range of commodities to be imported.
Resist the temptation to file a bond for just the minimum amount demanded by CBP. This can turn out to be “penny wise and pound foolish” costing you a good deal more over time. Bear in mind that CBP does sufficiency calculations monthly. Going with the minimum could result in CBP generating multiple insufficiency letters over a period of just a few months. Refer to the case study Consequences of Special Tariffs on Import Bonds on our website. The hypothetical importer in the illustration will have incurred much more in bond-related expenses over a relatively short period of time by failing to do his/her own projections.
If the surety requires collateral at some point based on aggregate bond liability vs. the financial strength of the importer/principal, the importer can incur substantial standby letter of credit expenses. Also, resulting impairment of the importer’s credit line with its lending institution can be material.
There’s just no substitute for due diligence. You’ve got to do your own math to arrive at a conservative (meaning, large enough) prospective 12 month DTF projection that takes into account special tariffs, timing of tariff changes, and other factors. Make sure you select a bond amount that is at least 10% of that (and round up as does CBP).
Understand that sureties must consider aggregate liability when underwriting bond principals. This involves looking at the sum of the face amounts of all bonds written for a given principal. When special tariffs apply, there comes a point in time where the aggregate liability can be more than twice what it could have been with sound projections and planning. Be aware that sureties underwrite/charge based on all liability undertaken. Bear in mind too, that the bond principal’s liability for liquidated damages is limited by bond amounts. More aggregate bond liability equals more liquidated damages exposure for the importer/principal. Early termination of a bond does not reduce the principal’s liquidated damage liability or the surety’s liability for duties/liquidated damages.
When you receive an insufficiency letter from CBP, do act promptly but don’t rely on the minimum bond amount shown. Do your own projections. You decide what amount you need to protect your interests and limit your costs. Willson International is your best source for assistance on bond matters. Work with Willson to ensure that your bond and other CBP-related matters are addressed in an informed and professional manner.
ACH is an electronic payment option that allows participants to pay U.S. Customs duties, taxes & fees (DTF) directly to CBP electronically, as well as receive refunds of DTF electronically. The ACH system allows the importer to pay directly from their account to U.S. Customs and Border Protection and now integrates with the Automated Commercial Environment (ACE).
By enrolling in ACH, you can improve cash flow management, ensure compliance with U.S. Customs requirements, and benefit from an efficient payment system integrated with Automated Commercial Environment.
*NACHA is the National Automated Clearinghouse Association. To participate in ACH, the importer’s financial institution must be a U.S. bank NACHA participant with Electronic Data Interchange capability. Several banks in Canada are NACHA participants. Please contact your financial institution to see if they are NACHA compliant and confirm your options for participating in ACH.
Tip: You will need a 9-digit numerical routing number that starts with zero, 1, 2 or 3.
ACH Debit
With an ACH debit account, you would provide your bank account number and routing number and CBP would automatically draw the funds from your account each billing cycle.
ACH Credit
With an ACH credit account, you are billed for DTF by CBP through the ACE Portal. Upon receipt of your bill, you would push the funds to CBP. Note that importers must establish an ACE Portal account to utilize this option.
ACH Refund
Importers may also submit an ACH refund enrollment application, which is separate from the ACH Debit/Credit applications. ACH refund is available for anyone with a taxpayer-assigned identification number and a U.S. bank account. For information about ACH Refund, please contact (317) 298-1200 ext. 1178 or email GMB.ACHREFUNDSUPPORT@CBP.DHS.GOV
After you are approved for CBP ACH, you will need to determine which payment option you wish to be set up with. There are two preferred payment options for frequent importers. Those options are Periodic Monthly Statements (PMS) or Daily Statements.
PMS
With PMS, entries are combined and paid on a monthly basis. There is an approval process for PMS separate from the ACH Credit/Debit application. To participate in PMS, importers must have a U.S. Customs continuous bond and already be approved for ACH. You cannot apply for PMS if you are not approved for ACH. Willson International can query your tax ID with CBP to verify if your company has already been approved for PMS or if an application will need to be submitted for PMS approval. If PMS approval is needed, Willson International can assist you with submitting your application for PMS approval.
Daily Statements
With Daily Statements, entries are consolidated and paid per day.
Automated Clearinghouse | U.S. Customs and Border Protection
Signing Up for Automated Clearinghouse | U.S. Customs and Border Protection
CBP Form 400 – ACH Application | U.S. Customs and Border Protection
CBP Form 401 – Automated Clearinghouse (ACH) Credit Enrollment | U.S. Customs and Border Protection
ACH Refund | U.S. Customs and Border Protection
Applying for an ACE Secure Data Portal Account | U.S. Customs and Border Protection
ACE Secure Data Portal Account Application | U.S. Customs and Border Protection
Disclaimer: The information provided on this website is for informational purposes only and is offered without liability on the part of Willson International. It is based on the best available information; however, the tariff environment is rapidly changing, and some details may become outdated. Any advice and/or information contained in this communication is not binding on U.S. Customs and Border Protection (CBP) or the Canada Border Services Agency (CBSA), nor does it satisfy the requirements for “reasonable care” in conducting your customs business. For the most up-to-date and accurate information, please contact your customs broker or trade advisor.
