Section 232 Priority Updates: How It Affects Your Customs Bond
The Section 232 tariffs on steel and aluminum have begun to go into effect and United States importers are already feeling the effects on their Customs Bonds.
If you are unsure of what to expect regarding the current administration’s new tariffs on steel and aluminum imports, do not be afraid. This new legislation is an ever-evolving situation that we have only just begun to see the effects of. However, to help you prepare for the changes, here are 3 tips our experts have put together based on events witnessed by our affected clients this week.
3 Tips Regarding the Section 232 Tariffs
- Avoid Bond Insufficiency
This past week we saw Customs begin rendering bonds insufficient for businesses whose bond size was too small to cover the recent increase in tariffs, in some cases, this was done without prior warning by Customs. In the event, your bond is immediately rendered insufficient any goods coming in after this determination will not clear Customs until a new bond of the appropriate size is placed.If you are subject to these tariffs, review your bond size by contacting your bond provider immediately.
- Determine Your Correct Bond Size
Start with the worst case scenario, what is the maximum amount of total duties, taxes, and fees you could pay over the next year, and don’t forget to adjust your calculations to reflect the new tariffs (25% on steel, 10% on Aluminum). Check out our full post on the Section 232 tariffs on steel and aluminum for more background information on who is affected.If you are unsure how to size your bond here is the formula: (Total Annual Duties, Taxes, and Fees) * 10% = Bond Size (50k is the minimum). So for example, anyone who is paying up to $500,000 in total annual duties, taxes, and fees would need a 50k bond.
- Stay Updated on Customs
Remember you, the Importer of Record, are ultimately responsible for your goods, and Customs expects you to stay updated on any changes. Which means it’s in your best interested to have a pulse on Customs. One place that we like to regularly check is the government message board, the Cargo System Messaging System, which frequently posts all kinds of Customs updates.