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Trade Dynamics
On June 5, the White House released the full text of President Trump's "Strengthening Customs Enforcement" executive order — and it reads less like a policy tweak and more like a tectonic shift for every foreign company shipping goods into the United States. The order doesn't target a single product category or a specific country. It targets the entire architecture of how imported goods enter U.S. commerce, starting with theImporter of Record (IOR).
📊 Key Numbers at a Glance
180-day compliance deadline for all IORs
Minimum penalty floor: 50% of assessed fines (no reductions for repeat violators)
Foreign IORs: banned from informal entry, must obtain C-TPAT certification
45-day window for DHS to submit legislative proposals
90-day window for revised penalty standards and disclosure rules
The core of the order is deceptively simple: ensure the Importer of Record is properly identified and held accountable for all duties owed. But the ripple effects are enormous. As Guan Jian, partner at Beijing Guangwen Law Firm, told Yicai: "This marks a shift from traditional cargo review and tariff collection toward a focus on importer qualifications, onshore asset enforceability, and supply chain transparency."
The executive order draws a sharp line between "U.S. Importers of Record" and "Foreign Importers of Record" — and the latter face dramatically higher barriers. A U.S. IOR must be established in the U.S., have its principal place of business there, and hold significant onshore tangible assets. Merely using a shell company or a nominal address won't cut it.
| Requirement | U.S. IOR | Foreign IOR |
|---|---|---|
| Informal Entry | ✅ Allowed | ❌ Prohibited |
| Continuous Bond | ✅ Permitted | ❌ Not Allowed |
| C-TPAT Certification | Optional | ⚠️ Mandatory |
| Onshore Asset Requirement | Standard | 🔥 Elevated |
| Good Standing Status | Required | 🔥 Strict Scrutiny |
For Chinese exporters who have relied on foreign-registered IORs, third-party customs brokers, or affiliate structures to clear goods through U.S. ports, this order signals the end of business as usual. "The new rules will definitely raise declaration costs and capital tie-up," Guan warned. Companies that previously operated through offshore entities will likely need to establish compliant U.S. entities — a process that demands significant onshore assets and operational substance.
Perhaps the most consequential change is the penalty regime. The order requires DHS to revise mitigation standards within 90 days, establishing a minimum penalty floor of 50% of assessed fines — unless a national security exception applies. Repeat violators lose any possibility of penalty reduction altogether.
What this means in practice: A company previously fined $200,000 for misclassification might have negotiated that down to $40,000. Under the new rules, the minimum payout would be $100,000 — and if you're a repeat offender, there's no negotiation at all. The deterrent effect is the point. As Yan Guangpu, an anti-dumping finance expert at Daoyue Legal Consulting, noted: "The penalties are mainly about deterrence. Once you're hit, the consequences could be devastating."
While the customs order grabs headlines, China's macro fundamentals continue to strengthen. SAFE data released June 7 shows foreign exchange reserves rose to $3.4422 trillion at end-May, up $31.7 billion (+0.93%) from April — driven by global equity rallies fueled by AI investment booms. Meanwhile, the People's Bank of China added 3.2 million troy ounces of gold for the third consecutive month, bringing reserves to 74.96 million ounces.
The RMB's global footprint is expanding too. BIS's latest triennial survey (April 2025) shows USD/CNY has overtaken USD/GBP to become the world's third-most-traded currency pair, with daily volume surging 59% to $781.3 billion. RMB's share of global FX turnover hit a record 8.6% — still far behind the dollar's 89.1%, but the gap with fourth-place sterling has narrowed to just 1.6 percentage points.
💡 Strategic Recommendations
Audit your IOR structure immediately: If you're using a foreign-registered IOR or relying on a customs broker to act as your importer of record, the 180-day clock is ticking. Start the process of establishing a compliant U.S. entity now — waiting until Q4 will be too late.
Boost your bond coverage: CBP is raising minimum bond levels for all IORs. Foreign IORs can no longer use continuous bonds. Budget for higher working capital tied up in single-entry bonds.
Apply for C-TPAT certification: This is now mandatory for foreign IORs filing formal entries. The certification process takes time — start immediately.
Use trade data to benchmark exposure: GMTD's customs data platform lets you search by HS code, buyer, and destination to see how your peers are structuring their U.S. import operations. Don't fly blind when the rules are changing this fast.
Diversify markets while you still can: With ASEAN trade growing 26%+ and RCEP dividends still unfolding, reducing over-reliance on the U.S. market isn't just strategic — it's becoming a compliance necessity.
Trade rules aren't written for the cautious — they're written to catch the unprepared. The new U.S. customs enforcement order is the clearest signal yet that the era of loose IOR compliance is over. GTD's customs data platform covers 200+ countries with multi-dimensional filtering by HS code, company name, and purchase volume. Don't rely on guesswork when the penalties start at 50%. Let the data lead.
