The Biden Era of Bonds
In the month of April 2021,IB&M saw its highest level of monthly bond increases since former President Trump was in office. With U.S. and China relations as icy as ever, there appears to be no sign of tariff reductions on the horizon. As reports in a recent NCBFAA webinar on U.S./China relations stated, we are more reliant than ever on Chinese goods. In addition, China has shrugged off the effects of tariffs with an overall 40% increase of exports year over year.
What does that mean for customs brokers and their importing clients? More of the same we’re afraid. Higher Tariffs on Chinese merchandise and ensuing Bond Increase letters do not appear to be going away any time soon. We recommend customs brokers advise importers not to simply take the bare minimum bond amount requested on CBP's increase demand letter. We instead recommend importers go with a bond amount based on CBP’s guidance to Forecast the next 12 months of anticipated duties to avoid Bond-Stacking Liability. Customs Brokers should use entry data from CBP and work closely with clients to avoid insufficiency letters, demurrage, unnecessary collateral, cash tie-ups, and additional single entry bond fees.
IB&M’s Bond Sufficiency Tracker lets brokers easily sort their bonds by highest saturation to least to address bonds first that are nearing insufficiency; or already insufficient based on CBPs formula for determining bond amounts.
Our MSBAR report compiles entry data from Customs and allows brokers to see all entries, values, and estimated duties for a given importer nationwide to properly consult on forecasting the accurate bond amount needed.