Every week, in the back of The Economist, there is a large list of trading stats. It’s fun to look at, but seems very abstract and removed from the reality of what trade and import/export actually mean. The people who are actively trading in the economy understand this reality. These are the ones who load containers onto cargo ships, keep track of global logistics, pilot the boats, and who receive the vast array of imports into our harbors and across our borders. From the ground, it looks a lot different, and there is much more to consider.
Anyone who works in imports knows that dealing with the Customs and Border Patrol (CBP) can be tricky. Customs is tasked with keeping us safe and making sure that tariffs and taxes are paid to help keep trade practices fair. It’s a tough job, and we all recognize that, even if we rage against the inconvenience. A Customs Surety Bond can streamline the process of importing goods into the country while protecting the parties involved. Understanding the need for these bonds is key for anyone who works in the global economy.
The Convenience of Customs Surety Bonds
If you import any commercial goods into the United States, you need a Customs bond. There are a few exceptions: if the value of goods you import is less than $2500, you generally don’t need one. The exception to this exception is food and firearms, both of which require a bond if you are importing commercially, no matter the quantity or value. CBP collects tariffs on these imports and protects the US trade economy. Even the most ardent free-trade aficionados recognize the need for protection, especially when we’re talking about not just billions, but hundreds of billions of dollars worth of goods every year.
Needless to say, accounting for these goods at the harbor, the Canadian or Mexican border, or any of the innumerable airports across the country would be impractical. It is enough of a challenge to make sure imports aren’t a security threat. Tallying the prices would lead to incredible backlogs.
That’s where bonds come into play. Bonds give the US government recourse if the money owed for imported goods isn’t paid so that goods can clear customs faster. The minimum bond is $50,000, even for goods that are technically “duty-free.” According to the CBP, the bond guarantees the following:
- Duties, taxes and charges will be timely paid
- The US will be reimbursed and exonerated
- Entry into the US will be made or completed — material won’t pile up in harbors.
- Merchandise will be redelivered if requested
- Documents and evidence of shipment will be produced
- Merchandise will be examined
- Non-compliance with provision for admission will be provided
- Compliance with special requirements on duty-free entries
How Bonds Make the Global Economy Run Smoother
Right now, we’re in a period where global trade agreements are being battered around by politicians, most notably the Trans-Pacific Trade Agreement. Regardless of what happens with this agreement, free trade and global markets are going to be an important part of our economy. As global trade grows, both officials and consumers will be leery of products that they don’t know from countries with different standards. While the Customs Surety Bond doesn’t completely protect against this, it does ensure a modicum of responsibility on behalf of the producer and the importer and helps ensure more trade.
As imports grow, so will the need for qualified importers, which is why your business needs to be bonded by a trusted and well-respected bonding agency. It’s the backbone of the import business, and what you’ll need to thrive in it.
Getting a surety for your importing business requires the backing of a strong Surety company with a reputation you can depend on. Contact Surety1 today for a quick and fair bonding process that’ll get you to work.