Key points
- A surge of customs bond insufficiency notices in fiscal 2025 left U.S. importers exposed to roughly $3.5–$3.6 billion in uncovered duties and fees.
- The gap is driven by tariff hikes that increased duty liabilities — and therefore the bond amounts CBP requires under its “10% rule.”
- CBP issued tens of thousands of insufficiency notices (CBP calls these “insufficiencies”), forcing delays, higher surety costs and requests for collateral.
- Practical actions for importers: verify bond sufficiency monthly, talk to your customs broker and surety now, and prepare liquidity/collateral to increase bonds quickly.
Why this matters (1-minute explainer)
When importers bring goods into the United States, they must have a customs bond that guarantees payment of duties, fees and other liabilities. Recent Trump tariffs increases tied to the Trump administration’s trade policy raised the dollar value of duties importers owe — and because CBP calculates continuous bond requirements as a share of recent duty activity, many bonds suddenly became insufficient. The result: CBP issued record-breaking insufficiency notices in fiscal 2025, with a combined funding shortfall in the neighborhood of $3.5 billion.
The mechanics — how a tariff becomes a bond problem
- Tariff → higher duty on imported goods. If the tariff rate or the tariff base rises, the duty (the $ amount) owed increases.
- CBP’s 10% rolling rule. For continuous bonds CBP typically requires a bond equal to at least 10% of the importer’s last 12 months’ duties, taxes and fees. If duties jump, the bond must rise to match — and CBP reviews sufficiency regularly.
- Insufficiency notice / operational impact. If your bond is too small, CBP issues an insufficiency notice. Failure to remedy within the allowed window can lead to cargo holds, forced payment at entry, or termination of the bond. Importers have been scrambling to raise bond limits and post collateral.
(For reference: the federal agency that enforces these rules is U.S. Customs and Border Protection.)
The data snapshot (what reporters found)
Industry reporting—drawing on CBP data shared with news outlets—shows 27,479 insufficiency cases in fiscal 2025 and a combined insufficiency value approaching $3.5–$3.6 billion, the highest on record and roughly double the level seen in 2019 when earlier tariff actions also pushed bond needs higher. These numbers reflect both the quantity of importers affected and the dollar value of duties that did not have adequate surety behind them.
Why that range (3.5 vs 3.6)? different outlets round or report preliminary totals; the key takeaway is a multi-billion dollar shortfall and a record number of insufficiency notices.
Real operational pain: what importers and brokers are seeing
- Cargo delays — shipments held at ports until duties are paid or a new bond is in place.
- Higher surety costs and collateral demands — sureties re-assess risk and may require cash collateral or letters of credit before issuing larger bonds.
- Cash-flow stress — importers who anticipated lower duty bills now face immediate liquidity demands or the alternative of paying duties up front to release cargo.
What importers should do right now — a practical checklist
Immediate (within 24–72 hours)
- ✅ Ask your customs broker for your current continuous bond saturation (% used). If it’s >75% start action now. (Customs & International Trade Law Firm)
- ✅ Request an ACE report (Automated Commercial Environment) to see the 12-month duty history. (U.S. Customs and Border Protection)
Short term (within 7–30 days)
- ✅ If you’ve received an insufficiency notice, arrange for a larger bond or be ready to pay duties at entry. CBP typically gives a window (often 30 days) — use it. (U.S. Customs and Border Protection)
- ✅ Talk to your surety: be prepared to post collateral or negotiate staged increases. (S&P Global)
Operational changes to avoid recurrence
- ✅ Build a 3–6 month duty-liquidity buffer.
- ✅ Update internal forecasting to account for tariff scenarios (e.g., +10/ +25 / +50% duty scenarios).
- ✅ Consider hedging strategies in procurement contracts (e.g., price escalators, duty pass-through clauses).
Mini calculator — estimate whether your continuous bond may be insufficient
CBP continuous bond rule (simple): required bond ≥ 10% × (duties, taxes & fees paid over prior 12 months).
Example (step-by-step arithmetic — shown explicitly):
- Suppose your importer account paid $4,200,000 in duties during the prior 12 months.
- Calculate 10% of $4,200,000:
- 10% = 10 ÷ 100 = 0.10.
- $4,200,000 × 0.10 = $420,000.
- Required continuous bond ≈ $420,000.
If your current continuous bond is less than $420,000 (for example $50,000, the long-standing minimum), you are insufficient and at risk of receiving a CBP insufficiency notice. (Use your actual 12-month duty total in the same way.)
Broader economic picture (why policy choices ripple through supply chains)
Tariffs that raise duty rates can increase government receipts, but they also raise compliance costs and force surety markets and importers to rearrange working capital. Industry observers argue the policy has triggered a structural increase in bond demand and surety exposure; that, in turn, squeezes smaller importers who lack access to cheap collateral or large surety lines.
Quick Q&A — common importer questions
Q: If I get an insufficiency notice, can I pay duties to free my cargo?
A: Yes — paying duties at entry will release the goods. But that can harm cash flow; many importers prefer to increase the bond instead.
Q: Are single-entry bonds an option?
A: For one-off shipments, single-entry bonds exist but can be more expensive per shipment; continuous bonds are best for recurring importers.
Q: Will CBP retroactively collect past shortfalls?
A: CBP enforces current liabilities and will demand adequate surety for ongoing activity; sureties can pursue principals for reimbursements. Promptly addressing insufficiencies avoids enforcement escalation.
Bottom line (two sentences)
Tariff hikes have a predictable but sometimes under-appreciated technical effect: they increase duty bills, which in turn raise the bond levels CBP expects — and many importers were caught underbonded. The record-setting ~$3.5 billion shortfall is a wake-up call: review your bond, work with your broker and surety, and plan for higher duty volatility going forward.
Note / disclaimer: This article is informational only and does not constitute legal or accounting advice. For decisions that affect compliance, taxes or customs law, consult a licensed customs broker, trade attorney or CBP directly.