President Donald Trump signed an executive order titled “Strengthening Customs Enforcement.” If you import goods into the United States especially if you are a smaller business, source through a foreign supplier who acts as the importer of record, or rely on informal low-value entries this order is aimed squarely at you. It does not raise tariffs. Instead, it rebuilds the machinery that decides who is allowed to import, how much financial backing they must show, what they must disclose, and what happens when something goes wrong.

The timing will not surprise anyone who has moved a container this year. Since January, customs brokers and shippers across the country have reported a steady rise in customs holds placed on inbound freight more exams, more requests for documentation, more containers sitting at the port while U.S. Customs and Border Protection (CBP) verifies what is inside and who is responsible for it. The executive order formalizes and accelerates that shift. It is the policy backbone behind what importers were already feeling at the dock.

This briefing walks through what the order actually requires, why it is landing now, and most importantly what a small or mid-sized importer should be doing in the coming weeks and months to avoid being caught flat-footed. None of the changes take effect overnight; most run on 45-, 90-, and 180-day clocks tied to CBP rulemaking. But the direction of travel is unmistakable, and the businesses that prepare early will spend far less time and money than those that wait for a hold notice to force the issue.

Why This Is Happening Now

To understand the crackdown, it helps to follow the money. Over the past eighteen months, the cost of getting customs wrong or getting it deliberately wrong has climbed dramatically, because the duties at stake have climbed dramatically.

When the current administration took office in January 2025, the trade-weighted average U.S. import tariff sat at roughly 1.8 percent. Over the following months a cascade of new measures Section 232 actions on metals and other sectors, broad emergency and reciprocal tariffs, and product-specific duties pushed that average sharply higher. By early May 2025 the trade-weighted average peaked near 19.5 percent. After a series of court rulings and policy adjustments, it has since settled to around 8 percent as of mid-2026. Even at that lower level, the average duty on imports is several times what it was just two years ago.

That matters for enforcement because higher duties create higher incentives to cheat. When the duty on a shipment was a rounding error, undervaluing an invoice or misclassifying a product saved very little. When the duty is 8, 15, or 25 percent of the cargo’s value, the temptation to shave the declared price, slap on the wrong tariff code, or route goods through a third country to disguise their origin grows enormous. CBP knows this. The administration’s own framing of the order makes the link explicit: it describes customs reform as the necessary companion to its tariff agenda, ensuring that “duties are collected and tariffs are not evaded.”

The order also builds directly on two earlier moves that hit small and foreign sellers hardest. In 2025 the administration suspended the de minimis exemption the rule that had let shipments under $800 enter duty-free with minimal paperwork, a channel that overseas e-commerce sellers had used to flood the U.S. market with low-value parcels. Congress then permanently repealed the statutory basis for de minimis worldwide through the One Big Beautiful Bill Act, effective July 1, 2027. Closing that loophole funneled millions of shipments that used to slip through informally into the formal entry system, where they are now visible, dutiable, and subject to far more scrutiny. The new executive order is, in many ways, the enforcement layer built on top of that closure.

The duty backdrop, in numbers

The trade-weighted average U.S. import tariff has swung sharply since early 2025. The figures below illustrate why the financial stakes of a customs error have grown so much:

The Rising Tide of Customs Holds

Before reading a single line of the executive order, importers had already noticed the change on the ground. A customs hold is CBP’s instruction that a shipment cannot be released until the agency is satisfied whether that means an inspection, a document review, or clearance from another agency. Holds are not new, but their frequency and the rigor behind them have visibly increased through 2026.

The holds importers encounter come in several flavors. A manifest hold is triggered by an inconsistency between the cargo’s paperwork and what CBP expects. A commercial enforcement or Participating Government Agency (PGA) hold occurs when an agency such as the FDA, USDA, or Consumer Product Safety Commission needs to review a regulated product. Anti-terrorism and contraband teams place their own holds on shipments flagged as high risk. Each type can mean days or weeks of delay, and the financial pain falls on the shipper: exam fees, demurrage and detention charges while the box sits at the terminal, storage, and the broker’s time to work the shipment through release.

What ties the trend together is a broader philosophy that the freight industry has watched harden over the past year: enforcement is moving upstream, informal importing models are disappearing, and customs review is becoming an integral part of the shipping process rather than a formality at the end of it. For a large importer with a compliance department, more holds are a manageable nuisance. For a small importer running lean, a single container stuck in an exam can swallow a month’s margin. The executive order signals that this is the new normal, not a temporary surge.

What the Executive Order Actually Does

The order directs the Department of Homeland Security (DHS) and CBP to overhaul how importers of record are vetted, bonded, and held accountable. The importer of record, or IOR, is the party legally responsible for a shipment for declaring it correctly, paying the duties owed, and complying with the web of federal laws that govern imported goods. Much of the order is about tightening the definition of who can be an IOR and what they must prove to keep that status.

CBP has roughly 180 days until December 2026 to implement most of the core IOR changes through its normal rulemaking process. That means affected businesses will get formal notice and an opportunity to adjust, but it also means the requirements are coming, not merely being studied. Here is what the order sets in motion.

Minimum assets and bigger bonds for every importer

Every IOR will be required to maintain a minimum level of tangible domestic assets, bonding, or both. Minimum customs bond coverage amounts are set to increase. In plain terms, CBP wants every importer to have real financial skin in the game enough assets or bond capacity within reach of U.S. enforcement that, if duties go unpaid or penalties are assessed, there is something to collect against. For a small importer, this most likely shows up as a larger required bond and higher bond premiums, and possibly a requirement to demonstrate domestic assets you have never had to document before.

More information at registration

When registering as an IOR, businesses will need to give CBP substantially more data than today: anticipated import volumes, ownership and beneficial-ownership disclosures, business affiliations, and domestic asset disclosures. CBP wants to know who really controls the importing entity and how much it plans to bring in. This is a meaningful change for businesses that have operated through thin corporate shells or that have never disclosed their ownership structure to the agency.

A “good standing” requirement

CBP will define and enforce a “good standing” status for IORs. An importer found to have brought in fentanyl, nitazenes, other illicit substances, or precursor chemicals loses good standing and is barred from importing. Critically, an IOR that is not in good standing also cannot designate a customs broker to act on its behalf effectively shutting it out of the trade. Good standing becomes the gate you must keep passing through to keep importing.

Registry cleanup, risk tiers, and recurrent vetting

CBP will purge inactive importers from its registry, confirm that active ones are compliant, and sort importers into risk-based tiers using compliance history, enforcement actions, and audit results. It will also establish enhanced vetting including recurrent, ongoing vetting not just of importers but of everyone in the chain: customs brokers, custodians of bonded merchandise, and freight forwarders. Where you land in the tiering will likely influence how often your shipments are held and examined. A clean, well-documented compliance record is about to become a tangible operational asset.

The Squeeze on Foreign Importers of Record

The sharpest edge of the order is reserved for foreign IORs, and this is where the “small and foreign importers” framing really bites. The order draws a hard line between U.S. importers and foreign ones and stacks additional restrictions on the foreign side.

The definitions matter. A U.S. IOR is an entity organized under U.S. law, located in the United States, with controlling beneficial owners who are U.S. citizens or lawful permanent residents. To count as “located in the United States,” the entity must have its principal place of business here, a genuine physical presence where significant business activity happens, and sufficient tangible U.S. assets. Anything that fails this test is a foreign IOR. And CBP is explicitly directed to issue guidance preventing the use of shell companies or artificial corporate structures to dress a foreign operation up as a domestic one. Setting up a nominal U.S. mailbox entity will not satisfy the rule.

For foreign IORs, two restrictions stand out. First, foreign IORs will be prohibited from filing informal entries altogether. The administration cites the high volume of low-value goods from foreign sellers, their lower familiarity with U.S. trade law, and the practical difficulty of enforcing penalties against parties whose assets sit overseas. Second, foreign IORs filing formal entries generally will not be allowed to use continuous bonds. To bring goods in, a foreign importer will need to be validated through CBP’s Customs Trade Partnership Against Terrorism (CTPAT) program or work through a CTPAT-validated, licensed customs broker.

Notably, the administration frames this not as an outlier but as bringing U.S. practice in line with much of the world. Many countries already prohibit foreign entities from serving as the importer of record outright, or require foreign sellers to partner with a verified domestic party. The practical effect, though, is clear: overseas sellers who have been shipping directly into the U.S. market as their own importer will, in most cases, need a qualified U.S. partner to keep doing business. For small foreign suppliers without the scale to obtain CTPAT validation, that partner relationship is about to become a cost of market access.

Heightened Disclosure and Certification

The order also expands what importers must affirmatively certify and disclose about their goods. These requirements are designed to combat duty evasion and to enforce supply-chain laws that have, until now, been difficult to police at the border.

• Supply-chain certifications. Importers will need to certify compliance with laws including the Countering America’s Adversaries Through Sanctions Act (CAATSA) and the federal anti-smuggling statute (18 U.S.C. 545). They will also have to provide detailed information about a good’s supply chain and production methods down to manufacturer product identifiers and key specifications such as composition, grade, or size.
• Foreign export documentation. Within 90 days (by September 2026), CBP will require importers to submit whatever documentation the foreign exporter had to file with its own country’s customs administration before shipping to the United States. This gives CBP a way to cross-check the U.S. declaration against what was declared on the export side a powerful tool against undervaluation and origin fraud.
• Foreign tax and business identifiers. Importers will need to disclose certain foreign tax numbers and global business identifiers, making it harder to obscure who is really behind a shipment.

For an honest importer, none of this is impossible but it is more work, and it requires real visibility into your supply chain. If you do not currently know your manufacturer’s product identifiers or cannot readily obtain your supplier’s export paperwork, now is the time to build those data flows with your vendors. The certifications carry legal weight; signing one you cannot back up is its own form of exposure.

Penalties Get Real Teeth

Perhaps the most consequential shift is in how CBP will penalize violations. Historically, importers and brokers have often negotiated penalties down substantially through CBP’s mitigation process. The order narrows that path considerably.

• A 50 percent penalty floor. CBP will establish a minimum penalty floor of no less than 50 percent of the assessed penalty, absent exceptional circumstances that materially affect national security. The agency’s longstanding discretion to reduce penalties is being capped, and mitigation for repeat offenders is being eliminated entirely.
• Broker accountability. Customs brokers face maximum penalties if they fail to conduct due diligence, repeatedly represent noncompliant clients, or drag their feet on CBP information requests. Expect your broker to ask you more questions and demand better documentation their license is now more directly on the line for your shipments.
• Priority enforcement areas. DHS and the Department of Justice will prioritize forced labor, misclassification, undervaluation, and illegal transshipment, including investigations under the Enforce and Protect Act (EAPA), which targets antidumping and countervailing duty evasion.
• Liquidated damages and more audits. CBP will press liquidated-damages claims against bonds for noncompliance, restrict the use of in-bond movements, establish a minimum liquidated-damages floor, and increase audits across the board.

The combined message is that the expected cost of non-compliance is rising sharply. A misclassification that once drew a modest, negotiable penalty could now trigger a penalty with a hard 50 percent floor, a claim against your bond, and a higher chance of audit. For a small importer, a single serious finding could be existential. The economics now strongly favor getting it right the first time.

Faster Seizures and New Transparency

Within 90 days, CBP will move to expedite the seizure and disposal of non-compliant imports. That includes reducing the regulatory friction around voluntary abandonment, raising bond requirements for high-risk shipments, authorizing third-party disposal, and leaning on existing statutory authority to dispose of seized goods more quickly. For importers, the practical takeaway is that goods which run afoul of the rules may be gone abandoned or destroyed faster than before, with less opportunity to recover them.

On the other side of the ledger, the order directs CBP to add transparency. The agency will establish periodic review and expiration of confidentiality requests and begin publishing annual enforcement transparency reports. Over time, that should give importers and their advisors better visibility into how enforcement is actually being applied which sectors, which violations, which penalties information that can inform smarter compliance decisions.

The Timeline You Should Be Watching

The order runs on staggered deadlines. None of these requirements bind importers today, but each marks a point by which CBP is directed to act. Use them to pace your own preparation:

• 45 days (by mid-July 2026): The Secretary of Homeland Security submits legislative recommendations to the President to further strengthen customs enforcement a signal of what may become law down the road.
• 90 days (by September 2026): Foreign export-documentation requirements, revised penalty and mitigation standards, streamlined disposal procedures, and new transparency measures are due.
• 180 days (by December 2026): The core IOR overhaul asset and bond minimums, expanded registration data, the good-standing requirement, registry cleanup and tiering, and enhanced vetting is targeted for implementation.
• 1 year (by June 2027): CBP delivers an effectiveness report to the President. Note that this also lands just before the statutory de minimis repeal takes effect on July 1, 2027.

What This Means for a Small Importer

Strip away the regulatory language and a few practical realities emerge for small and mid-sized businesses that import.

First, the era of frictionless, low-visibility importing is ending. If your model has depended on informal entries, on a foreign supplier acting as the importer of record, or on the old de minimis channel, that model needs to change. Foreign suppliers shipping as their own IOR will, in most cases, need a qualified U.S. importing partner or CTPAT validation. If that describes your supply chain, start the conversation with your vendors and your broker now rather than in December.

Second, compliance quality is becoming a competitive advantage. CBP’s risk tiering means that importers with clean records, complete data, and solid documentation will move through the border faster and get held less often. Those with sloppy paperwork or thin corporate structures will see more holds, more exams, and more delay each carrying real cost. Investing in good classification, accurate valuation, and proper recordkeeping is no longer just risk avoidance; it is operational speed.

Third, the cost of a mistake has gone up. With a 50 percent penalty floor, the elimination of repeat-offender mitigation, claims against bonds, and more audits, an error that used to be a manageable cost of doing business could now be a serious financial event. The math has shifted decisively toward prevention.

Fourth, expect higher carrying costs. Larger required bonds, possible domestic-asset requirements, more documentation, and the need to partner with validated U.S. entities all add expense. These are real costs that smaller importers should build into pricing and cash-flow planning for late 2026 and beyond.

An Action Checklist for the Next 90 Days

You cannot comply with rules CBP has not yet written, but you can position your business to absorb them smoothly. A practical sequence:

1. Confirm your importer-of-record status. Determine whether you, or a foreign supplier, are the IOR on your entries. If a foreign entity is your IOR, identify how you will restructure a U.S. importing partner, CTPAT validation, or a CTPAT-validated broker.
2. Talk to your customs broker now. Ask how they are preparing, whether they are CTPAT-validated, and what additional documentation they will need from you. Expect more diligence questions and welcome them.
3. Review your bond capacity. Speak with your surety about likely increases in required bond amounts and budget for higher premiums.
4. Audit your classifications and valuations. Misclassification and undervaluation are named enforcement priorities. A proactive internal review or a professional one is far cheaper than a penalty with a 50 percent floor.
5. Build supply-chain data flows. Start collecting manufacturer product identifiers, product specifications, and your suppliers’ export documentation now, so the September disclosure requirements do not catch you without the records.
6. Tighten your recordkeeping and ownership documentation. Be ready to disclose ownership, beneficial ownership, affiliations, and domestic assets at registration.
7. Map your exposure to priority areas. If you source from regions associated with forced-labor concerns or have any transshipment in your supply chain, get ahead of it these are explicit enforcement targets.

The Conclusion

The “Strengthening Customs Enforcement” order is not a tariff increase, but it may reshape day-to-day importing more than any single tariff has. It raises the financial bar to be an importer, narrows who can play that role, demands far more disclosure, and sharply increases the penalties for getting it wrong. The rise in customs holds that brokers and shippers have reported all year is the leading edge of this shift; the order codifies it and pushes it further.

For large importers with compliance teams, this is an adjustment. For small importers and foreign sellers, it is a genuine inflection point one that rewards early preparation and punishes delay. The businesses that use the rulemaking window between now and December 2026 to clean up their classifications, shore up their bonds, formalize their importing structure, and build real supply-chain visibility will find the new regime manageable. Those that wait for a hold, an audit, or a penalty to force the change will pay considerably more for the same outcome.

If you are unsure where your business stands under the new rules particularly if a foreign entity currently serves as your importer of record or you have relied on informal entries this is the moment to get a clear-eyed assessment and a plan. The deadlines are on the calendar; the advantage goes to those who move first.