Presidential EO signals intent to tighten import compliance enforcement

President Trump issued an Executive Order (EO) on June 3, 2026, entitled “Strengthening Customs Enforcement,” indicating the administration's intent to tighten Customs and Border Patrol (CBP) enforcement of importation regulations.

The EO gives the US Department of Homeland Security (DHS) 180 days to revise importer eligibility regulations, guidance, and policies. For example, the EO directs DHS and CBP to increase enforcement of existing customs laws by establishing a 50% minimum penalty floor limiting CBP’s discretion to reduce penalties — just one of several expectations outlined in the EO.

Long Overdue Reforms

“Customs reform is long overdue,” the EO states. “Systemic inefficiencies, loopholes, insufficient enforcement mechanisms, and outdated processes have created opportunities for malign actors to evade Federal law.” The EO provides examples of noncompliance including undervaluing imports, withholding critical information about the Importer of Record (IOR) and the goods being imported, and avoiding payment of duties.

“Many times, I've seen a very large brand — the Importer of Record — with all of the tariff classification data for the company's 100K+ SKUs in a single spreadsheet on a SharePoint site,” says Jackson Wood, Director of Industry Strategy, Global Trade Intelligence for Descartes. “The explanation: the customs broker handles it. This EO is a warning that the explanation is no longer going to be enough. IORs have always been responsible for customs compliance but there have been a lot of gray areas. The EO suggests there will be far fewer gray areas moving forward.”

Wood continues, “The EO addresses visibility into supply chains, country of origin, and valuation methodologies — all core elements of import compliance. This is about programmatic integrity on the side of importers and service providers. The EO is giving CBP more leverage to be able to interrogate an importer or customs broker and hold them to a standard around the quality of their compliance programs and their infrastructure.”

Wood likens the new direction of import enforcement to US export controls in that there are very firm requirements driving importers and their trading partners to take this seriously and invest appropriately. When they are audited or when there is a transgression, they are going to be evaluated against a much higher bar than in the past.

What is the ultimate purpose of this EO? One stated objective is to support the President's America First policy in trade. “I think friction is being introduced to make it easier to do business contained in the United States,” Wood agrees.

However, Wood believes the other objective is to increase tariff compliance. Because tariffs are higher, there is more money at stake, so companies are far more inclined to avoid paying some of those significant costs. Conversely, the government is determined to collect every tariff dollar they are entitled to.

Making Compliance Mission Critical

“Some companies have treated trade compliance as mission critical, so they have significant investments in people and business infrastructure, including technology, to do everything by the book,” Wood explains. “Other large companies have only been willing to do the absolute bare minimum, and do not treat this as a strategic competency for the business. Now there will be many large organizations that recognize they have to take compliance more seriously — and they have the resources and organizational capacity to do it.”

Wood continues, “But smaller organizations — particularly customs brokerages and LSPs — are dealing with incredibly small margins and other cost pressures, so it can be difficult to justify the investment in compliance infrastructure because the business just can't handle it. I think it's going to be most challenging for organizations of that size, simply because they will have to hire more people, and build out the requisite record-keeping, analysis capabilities, and documentation management. So, I think the impact is going to be uneven. For smaller or medium-sized organizations, this is a challenge both financially and operationally.”

Wood adds, “AI is the wild card here. It's certainly in the early stages, but it should give some of the smaller, more sophisticated organizations a chance to improve compliance. In addition, I would expect there to be some accommodation for American businesses, while CBP is less flexible with foreign companies operating as an IOR in the US.”

Preparing For Change

In terms of next steps, Woods recommends that importers and their partners start with a brutally honest self-assessment of how well they are set up today. Ask questions like: How do we determine HTS classification? How are we set up to verify country of origin declarations or claims made by our suppliers? How quickly can we respond to an audit request from CBP or DHS? And ultimately, what do we need to change in our business?

Wood also says a key advantage will be a reliable, secure and scalable single source of truth for all trade compliance data. “A spreadsheet on a SharePoint page just isn't sufficient,” he asserts. “A degree of dynamism inside your information management assets is no longer a luxury. The industry has come a long way in terms of good digital tools that not only help perform classification faster and more accurately but make it accessible and keep it secure and updated in near real time. Technology is just one piece of the puzzle, but it can certainly be a leverage point to help organizations navigate this regulatory uncertainty.”

The bottom line is that importers need to start now. While it is true that sometimes the current administration does not follow through or pivots on policies, Wood does not recommend the “wait and see” approach. “Resilience and responsiveness in the face of volatility are now mission critical for businesses conducting international trade. The ability to respond to these types of regulatory shocks is going to be table stakes for the next two and a half years. Using the next 180 days to improve your compliance and accountability capabilities will help make the coming changes easier to navigate. Read the EO, understand it, talk to your team, talk to experts, have a plan, and keep moving.”

Wood concludes, “If you just wait to see what CPB is going to do, that's asking for trouble. I think the best approach is to prepare for the worst and hope for the best.”