Trump overhauls customs enforcement for $3.4T in annual imports

President Trump signed the executive orderExecutive OrderA written directive from the President directing federal agencies to implement or change policy without requiring congressional approval.Key ConceptExecutive OrderA written directive from the President directing federal agencies to implement or change policy without requiring congressional approval.Open conceptBookmark titled 'Strengthening Customs Enforcement' on June 3, 2026, in the Oval Office, alongside CBP Commissioner Rodney Scott and Senior Counselor for Trade and Manufacturing Peter Navarro. The order directs the Department of Homeland Security and CBP to complete a comprehensive overhaul of importer vetting, bonding standards, and penalty enforcement within 180 days through standard notice-and-comment rulemakingNotice-and-Comment RulemakingAPA process requiring agencies to publish proposed rules and accept public comments before finalizing.Key ConceptNotice-and-Comment RulemakingAPA process requiring agencies to publish proposed rules and accept public comments before finalizing.Open conceptBookmark under the Administrative Procedure ActAdministrative Procedure Act1946 law governing how federal agencies develop regulations and make decisions through rulemaking and adjudication.Key ConceptAdministrative Procedure Act1946 law governing how federal agencies develop regulations and make decisions through rulemaking and adjudication.Open conceptBookmark.

The order covers an import system that processes roughly $3.4 trillion in goods annually and generated over $216 billion in tariff revenue for the federal government in fiscal year 2025, a 146 percent increase from FY2024. It's the first comprehensive revision to importer-of-record eligibility rules since CBP was created in March 2003.

CBP didn't exist before 2003. Congress created it under the Homeland Security Act of 2002 as the nation's first unified border security agency, merging the U.S. Customs Service (Treasury), the INS Border Patrol (Justice), and federal agricultural inspection into the new Department of Homeland Security. The Sept. 11 attacks had exposed the danger of siloed agencies managing separate pieces of the border. CBP absorbed roughly 42,000 employees from its predecessor agencies on its first day, March 1, 2003.

The Customs Trade Partnership Against Terrorism, known as CTPAT, launched in November 2001 — before CBP even existed — as a voluntary supply-chain security program the U.S. Customs Service created in the weeks after 9/11. It's now CBP's primary certification for trusted traders. The June 2026 executive order makes CTPAT validation a legal prerequisite for foreign importers, transforming a voluntary partnership into a mandatory compliance gate.

The centerpiece of the order is a 'good standing' requirement for all importers of record. CBP must define good standing based on compliance history and payment of customs liabilities. Any importer found to have illegally brought fentanyl, nitazenes, or precursor chemicals into the country automatically loses good standing and loses the right to import anything into the United States or to hire a customs broker to import on its behalf. The fentanyl bar is absolute: no exceptions, no appeal pathway is specified in the order itself.

Since January 2025, CBP has seized nearly 11,000 pounds of fentanyl at ports of entry, an 8 percent increase over the prior year. Officials cite international mail and small parcels from China as a primary smuggling vector.

The order draws a sharp line between U.S.-based and foreign importers of record. Only U.S.-based importers can file informal entry transactions, which cover the majority of commercial shipments valued below the formal entry threshold. Foreign importers filing formal entries must either be CTPAT-validated or retain a CTPAT-validated, licensed customs broker to file on their behalf. Foreign importers may not use continuous bonds — the rolling financial security most established importers rely on — unless CBP specifically determines that revenue protection and compliance are assured.

The Coalition for a Prosperous America called the restriction on foreign importers the most significant overhaul of importer accountability in a generation, arguing that non-resident importers had used weak bonding and informal-entry loopholes to evade duties and undercut domestic producers.

All importers — domestic and foreign alike — face new disclosure requirements under the order. They must provide CBP with detailed ownership and beneficial ownership information, business affiliations, anticipated import volumes, supply chain data including manufacturer identifiers, and production methods. Importers must also certify compliance with critical supply chain requirements and disclose foreign tax identification numbers. These disclosures are not optional: CBP can deny or revoke importing privileges for failure to provide accurate information.

EY's trade and customs practice noted that the disclosure and certification requirements impose new compliance costs even on importers with clean records, because the obligations apply broadly to all importers — not only those suspected of violations. Trade law firms including Troutman Pepper Locke called it a fundamental shift, noting that the order treats importing as a revocable privilege rather than a default right.

The order mandates a minimum penalty floor of 50 percent of the assessed penalty for customs violations, removing CBP's current discretion to substantially reduce fines in most cases. For repeat offenders, the standard mitigation calculations are eliminated entirely. CBP must implement the new penalty framework within 90 days, a tighter deadline than the 180-day rulemaking window for bond and vetting changes.

Under current practice, importers who voluntarily disclose violations can receive penalties as low as zero to 50 percent of duties owed. The new floor means even first-time voluntary disclosures will face at least a 50 percent penalty unless the Secretary of Homeland Security certifies that reduction serves national security interests — a narrow carveout.

DHS Secretary Markwayne Mullin, confirmed by the Senate 54-45 on March 24, 2026, oversees CBP and is responsible for implementing the order's directives. Mullin replaced Kristi Noem, who left the department earlier in 2026. CBP Commissioner Rodney Scott, a 30-year CBP career official confirmed 51-46 in June 2025, was present at the signing and issued a statement saying the agency stands ready to enforce the order. The order also directs the Secretary to submit legislative recommendations to Congress within 45 days for any statutory changes needed to fully implement the administration's customs enforcement goals.

The order doesn't take immediate effect for importers. Because CBP must go through notice-and-comment rulemaking under the Administrative Procedure Act, affected businesses will have an opportunity to submit public comments before final rules bind them. The APA process typically takes 12 to 24 months from notice to final rule, though the order sets a 180-day deadline for CBP to publish proposed rules. The penalty floor changes, however, are internal agency guidance directives CBP can implement more quickly without full rulemaking.

Trade attorneys noted that the Supreme Court's February 2026 ruling in Learning Resources, Inc. v. Trump, which struck down IEEPA-based tariffs as exceeding presidential authority, may create pressure on the administration to anchor customs enforcement changes in explicit statutory authority rather than relying solely on executive order.

The executive order fits into a broader administration pattern of treating trade compliance as a national security and public health matter rather than a purely economic one. The January 2025 executive order on IEEPA fentanyl tariffs imposed additional duties on Chinese goods specifically because CBP determined China-origin packages were a primary fentanyl smuggling vector. That IEEPA authority was later struck down by the Supreme Court in February 2026 as exceeding presidential authority over tariffs.

Flexport, one of the largest third-party logistics providers, warned clients that the order 'may have a significant impact on importers using foreign entities as the IOR, particularly for low-value shipments and e-commerce-style import models.' Small importers and marketplace sellers who rely on foreign factories filing their own entries face the most disruption under the new foreign-IOR restrictions.

The administration's fact sheet characterizes the order as protecting American consumers and businesses from unfair competition enabled by 'weak bonding' and informal-entry loopholes that let foreign actors 'shield themselves from the duties, penalties, and laws that domestic producers and legitimate U.S. importers must obey.' Critics in the trade compliance industry counter that the real cost falls on mid-size U.S. importers who source from overseas factories and will face higher bonds, more paperwork, and increased audit exposure even if they've never violated customs law.

The National Customs Brokers and Forwarders Association of America hadn't issued a formal public statement as of the date of signing, but individual customs brokers quoted in trade press noted that the order places new due diligence obligations on licensed brokers that could expose them to maximum penalties for representing clients who turn out to be noncompliant.