President Donald J Trump signed an executive order on June 3, initiating a comprehensive reform of U.S. customs enforcement. The order focuses on tightening importer of record (IOR) requirements, expanding disclosure obligations, and increasing penalties for noncompliance across the board. Within 180 days, the Department of Homeland Security (DHS) must revise IOR eligibility rules, requiring minimum domestic asset or bonding levels and mandating beneficial ownership disclosures.
Foreign IORs will face significantly heightened requirements, including a prohibition on filing informal entries and restrictions on using continuous bonds for formal entries unless revenue protection is assured by CBP. Additionally, foreign IORs filing formal entries must be validated under the Customs Trade Partnership Against Terrorism (CTPAT) program or utilize a CTPAT-validated licensed customs broker. The order also directs CBP to establish new import disclosure and certification requirements within 90 days, encompassing supply chain and production method disclosures, and foreign tax and business identifier reporting.
In related legal developments, the Department of Justice (DOJ) appealed the Court of International Trade's (CIT) April 17 order on June 2, which had directed U.S. Customs and Border Protection (CBP) to refund duties collected under the International Emergency Economic Powers Act (IEEPA). The government argues the CIT's universal injunction is unlawful, citing a recent Supreme Court ruling. Simultaneously, the DOJ sought to block an order compelling CBP Commissioner Rodney Scott to testify at a June 9 hearing, contending it violates precedent for high-ranking executive officials.
Further tariff adjustments are underway, with President Trump signing a proclamation on June 1 to amend Section 232 tariffs on select steel, aluminum, and copper derivative products, effective June 8 through December 31, 2027. Agricultural and residential HVAC equipment will see their tariff rates reduced to 15%, while mobile industrial equipment from U.S. trade agreement partners will also be eligible for a 15% all-in rate. The threshold for goods considered "entirely" made of U.S. metal, qualifying for a 10% rate, has been lowered from 95% to 85% domestic content.
The Office of the U.S. Trade Representative (USTR) also proposed new Section 301 tariffs. A report released June 1 recommended 25% tariffs on a broad range of Brazilian goods, citing unfair trade practices in areas like digital trade and intellectual property, though over 1,600 HTS exemptions are included. Brazil's President Lula da Silva rejected the findings and warned of potential retaliatory measures. Separately, USTR proposed tariffs on imports from 85+ countries over forced labor practices, with tiered rates of 10% or 12.5% depending on the country's trade relationship and enforcement of labor bans.
Globally, ocean freight markets continue to experience high demand and rising rates. Trans-Pacific Eastbound (TPEB) and Far East Westbound (FEWB) lanes are seeing strong demand, leading to increased utilization, rollovers, and the implementation of Peak Season Surcharges (PSSs) and emergency bunker surcharges. Cape of Good Hope diversions continue to absorb significant global capacity, contributing to longer transit times and empty container shortages in Asia.
Trans-Atlantic Westbound (TAWB) lanes face high vessel utilization and port congestion in Northern European and Mediterranean hubs, alongside critical container and chassis shortages in parts of Europe. Air freight markets present a mixed picture, with some softening in North China to the U.S. West Coast, but sustained high demand and tight space in South China, Taiwan, Vietnam, Cambodia, and Thailand, driven by e-commerce and maritime disruptions. Importers and freight forwarders are advised to assess their structures and supply chains in anticipation of these evolving regulatory and market conditions.