Since returning to office in January, President Trump has swiftly implemented a new foreign trade policy, including enacting new tariffs. Businesses that rely on imports — particularly from China — are now hastily evaluating the impact these changes or potential changes will have on their operations. They’re also thinking through what actions these changes will necessitate. Among many other considerations, these companies may need to weigh the potential material impacts of new tariffs on their U.S. customs importer bonds, which are essential to importers’ operations and bottom lines.
Importer Bonds are a commercial surety product that has increased in complexity and risk over the last 15 years due to innovation and technology, foreign policy changes, and inflation. These changes have yielded increased claims activity and severity for sureties. Some sureties take a broad-brush collateral approach when anti-dumping and countervailing duties - or other characteristics that enhance the risk - are present. This is particularly true when a bond amount increases above $100,000. The stacking or cumulative nature of Importer Bond liability, coupled with the reasonable expectation for several to many years of exposure following the termination of a bond or the end of a bond period, can also exacerbate collateral requirements.
Customs bonds play a key role in the U.S. economy, but more importantly, may be critical to your company’s operations and revenue.
The value of goods entering the U.S. each year exceeded $3.3 trillion in fiscal years 2022, 2023, and 2024 (opens a new window), according to data from U.S. Customs and Border Protection (CBP). Duties, taxes, and fees associated with these imports totaled nearly $112 billion for fiscal year 2022 and have topped $88 billion in each fiscal year since 2021. If you are an importer without an adequate customs importer bond in place, you could lose your ability to import and, therefore, sell your goods in the U.S. economy.
Lockton’s National Surety Practice is here to help you manage the changes to your Importer Bonds in a volatile trade and tariff environment. Lockton has strong relationships with many surety companies with a deep understanding of customs bonds, including sureties with Treasury Listings that are adequate to support bonds in excess of $1 billion. The 125 members of our National Surety Practice have experience with this complex type of surety bonds, as both brokers and underwriters. To discuss your U.S. customs bonds with a member of our team, contact your Lockton Client Advocate or Producer.