The hits just keep on coming for those businesses outside of the U.S. that are looking to do business with U.S. based customers.
The Trump administration has proposed changes to the import process under Executive Order 14411 - "Strengthening Customs Enforcement". The changes and updates are only at recommendation stage so far, but based on the recent track record of the current government, businesses outside of the U.S.A. should get ready to deal with them. The goal is straightforward - prevent cheap goods from flooding the U.S. market, and make it harder for overseas companies to ship hundreds of thousands of parcels into the country every day. This is part of the broader customs battle that the Trump has been fighting with countries like China, and follows recent changes to de minimis rules and other customs legislation.
The proposed changes are still being written, but as a broad overview, the following looks likely:
* Removal of Informal Entries - Currently, items with a value of less than $2,500USD can be cleared 'informally' through customs. That is, any duties or taxes can be paid as required, and items clear customs accordingly with minimal paperwork and delays.
* No continuous bond - Unless business can meet certain criteria, continuous bonds will not be possible unless the IOR (Importer of Record) can meet certain CBP criteria. This means EVERY incoming shipment will require its own bond - a minimum payment to ensure that guarantees all duties, taxes and other charges can be covered. So if your business is sending 100+ parcels a week into the U.S., a bond will have to be paid for EACH shipment - a huge hit to cashflow, and alot more paperwork required!
* Licensed customs broker or CTPAT approval - All importers will need to used a license customs broker, or be validated under the Customs Trade Partnership Against Terrorism program. This is a big operational change for businesses that have no legal presence in the U.S., as they will need to find a licensed customs broker willing to work with them.
In reality, the U.S. government is simply trying to make it harder and more expensive for foreign businesses to sell into the U.S. market, as part of its overall strategy to boost U.S. domestic production. The GOOD news is, foreign businesses can still ship and sell into the U.S., but it's looking more and more likely that these foreign entities will need their own legal presence in the country, and they'll need ot import larger, one-off shipments of stock to avoid high costs and mountains of paperwork.
If you're concerned that your existing business sales, of future growth, may be harmed by these changes, let me know. We can work out a plan together to ensure minimcal disruption for your business as it seeks to grow its footprint in one of the world's largest consumer markets.
