If the Supreme Court rules President Donald Trump’s International Emergency Economic Powers Act (IEEPA) tariffs are illegal, U.S. companies would not only be in line to receive tariff refunds, but also billions of dollars paid to insurance companies in customs bonds and collateral. Customs bonds, also known as surety bonds, provide coverage to importers guaranteeing the payment of duties and taxes levied on imported goods. The value of these bonds and related collateral has soared alongside the steepening tariffs levied by the Trump administration.
Importers buy these bond through specialized insurance companies known as surety companies. These bonds, issued around 30 days before their imports arrive in the United States, are required by U.S. Customs and Border Protection for all trade entering the country to ensure that Customs collects the requisite tariffs in the event that an importer does not pay its obligation. The bonds are held for 314 days by Customs in accounts that bear no interest. During this time, duties that were paid can be reviewed and receive final government sign-off.
U.S. importers pay a premium to insurers for their bonds, with the premium typically calculated as 1% of the bond limit, and these bonds have soared as tariff rates rose. The price of customs bonds covers 10% of the duties and taxes paid over a rolling 12-month period, so if tariffs and taxes go up, the customs bond goes up as well.
