Why Are Tariffs Increasing Bond Amounts?
- Customs and Border Protection (CBP) requires the continuous importer bond amount to be at least 10% of the duties, taxes, and fees paid over the last 12 months.
- Because tariffs are included in “duties, taxes, and fees,” increased tariffs are resulting in higher required bond amounts.
- Since these tariffs took effect, the number of insufficiency letters issued by CBP in 2025 has increased by more than 700%.
What Happens When CBP Issues a Bond Insufficiency Letter?
- CBP reviews bond sufficiency monthly.
- If CBP finds a bond is insufficient, a notice would be issued, requiring the bond to be terminated and replaced within 30 days.
- CBP does not allow for a bond amount to be adjusted after the bond has been accepted. Therefore, the only way to change the amount is to re-write the bond.
- Failure to issue termination on the current bond within 15 days will result in CBP deeming the bond insufficient and unusable. Visit our website for more information on this process.
How does Re-Writing a Bond Mid-Term Create Underwriting Concerns?
- Stacking liability:
- Surety companies view their liability as fully earned once the bond is issued as CBP could make a claim on any transaction and compel a surety to pay up to the full bond amount.
- As a result, the surety may require the first year’s premium to be fully earned.
- Tail liability:
- The surety’s liability for a terminated bond remains open until all transactions secured by that bond have been liquidated. This process takes, at minimum, 314 days.
- Setting the correct bond amount proactively helps avoid unnecessary bond re-writes. Each re-write stacks the surety’s liability, which may trigger a full re-underwriting of the account and could lead to changes in underwriting terms or increased costs.
How Should an Importer Set an Appropriate Bond Amount?
Many importers have received multiple insufficiency notices within a short period of time. To help prevent this, we recommend that an importer:
- Estimate the duties, taxes, and fees they expect to pay CBP for a “worst-case scenario” for the next 12 months.
- Add a buffer to that figure – 20% for example, to allow for additional room and/or another potential tariff increase.
- Take 10% of the total to determine a realistic bond amount.
While there is no guarantee that a bond will remain sufficient, we believe this method will help the importer reduce the risk of triggering another insufficiency notice.
Download the Full Tariff Impact Flyer
Download the complete C.A. Shea – Impact of Tariffs on Importer Bonds flyer, including the interactive bond amount calculator (works only in Adobe Acrobat).
Note: The calculator inside the PDF requires Adobe Acrobat or Adobe Reader to function. Most browsers display PDFs but do not run interactive fields.