The baseline effective duty rate rates have increased exponentially. Chinese goods will skyrocket to104% (combination of 50% hike, the existing34% reciprocal tariff, and the20% fentanyl tariffunder IEEPA) And that’sbeforefactoring inSection 301 (25% or 7.5%),Section 232 steel/aluminum tariffs (25%),Section 201 sectoral tariffs, and variousanti-dumping duties. All imports from Europe are subject to 20% additional tariff. And so on , and so on....
Importers secure customs surety bonds to clear goods before paying duties. Surety bonds guarantee that Customs will get paid. If an importer defaults, the surety covers the debt up to the bond limit. Bond limits are typically set at 10% of estimated annual duties.
With tariffs spikes, bond limits can get overwhelmed by unliquidated duties. Once an importer’s unpaid duty liability nears their bond limit, they get hit with an "Insufficiency Notice." This is a warning that their bond is maxed out. If the limit is met, the import are held until a supplemental bond is obtained. This is known as "bond stacking."
From US Customs:
A U.S. Customs bond, a financial guarantee required by the U.S. Customs and Border Protection (CBP), ensures compliance with customs regulations and payment of duties, taxes, and fees for importing goods, especially commercial shipments valued at $2,500 or more. See US customs resources on bonds.
Raising bond limits triggers financial scrutiny from underwriters. Audited financials look for such things as weak cash flow, high debt, or low collateral assets. The underwriter may then demand collateral (often a letter of credit for 110% of the bond limit).
It is easy to imagine a company struggling in face of unexpected tariffs having to absorb duty and ordering of goods. For bonds, cash stays tied up until all entries liquidate (minimum 314 days after bond expiration)
By some estimates, a bond insufficiency crisis is immanent. This affects importers, customs brokers, port operators, and sureties. This represents a threat to essential supply chains.
Tariffs are the headline, but bond sufficiency is the ticking time bomb. Companies without deep liquidity will face a brutal squeeze—fast.