What Happens If You Can’t Pay Your Tariff?

Small- owners who import goods now face an unsettling reality: not knowing precisely what tariffs they’ll owe when their shipment hits U

Soil, or if they’ll be able to pay it

Tariffs are calculated by the U

Customs and Border tection (CBP) when shipments reach the U

This means that tariff rates can change between the time when your places its order and when your shipment arrives — potentially leaving you with a larger-than-expected tax bill

Changes and pauses to tariff rates over the past several months have made it increasingly difficult for owners to anticipate and plan for these added costs

So, what happens if you can’t (or don’t) pay your tariff bill

In part, the answer depends on whether you have a customs bond

See Your Loan Optionswith Fundera by NerdWalletWe’ll start with a brief questionnaire to better understand the unique needs of your

Once we uncover your personalized matches, our team will consult you on the cess moving forward

A customs bond is a legal contract between you, the CBP and a third-party surety company

Think of this bond as a of insurance for U

It guarantees that they’ll get paid the full tariff amount and other fees by the surety company in the event that you fail to pay your bill. es pay a premium for a customs bond, which you can get directly from a surety company or through a customs broker or logistics vider

You’ll still receive your shipment, but you’ll rack up additional feesAs long as you have a customs bond, you can get your shipment — even if you don’t pay your tariff right away

But if you don’t pay within 10 days, the CBP may begin the cess of collecting payment on the bond from the surety company

If that happens, you’ll be legally responsible for reimbursing the surety company

You may also be on the hook to pay:Interest

The CBP doesn’t being paid late

That’s why it charges interest on unpaid or underpaid duties

The CBP also doesn’t it when importers are negligent in their paperwork or try to skirt the system

It has financial and legal repercussions in place for importers who mistakenly (or purposefully) misclassify imported ducts, its value or country of origin — all of which can affect how much you pay in tariffs

If the surety company has to sue you to collect missed or unpaid tariffs, you may be responsible to foot the bill for its legal fees

On top of these added costs, you may also lose any collateral used to secure the bond

Your goods can sit in a warehouse for up to six monthsIf you don’t pay your tariffs within 15 days of arrival, your goods will be moved to a customs warehouse, where they can be held for up to six months

It’s still possible for you to get your shipment at this point, but first you’ll have to pay the duties owed, plus transportation and storage fees, as well as any penalties or fines

Your shipment may be destroyed or auctioned offAfter six months of sitting in the customs warehouse, the government will either auction off or destroy your goods

Certain perishable items may be sold or destroyed sooner

If sold at auction, the ceeds go toward covering unpaid tariffs, storage fees and other outstanding debts

You may be able to claim any money left over from a sale after all costs are paid

What other consequences are there

Failure to pay a tariff can lead to more than just fees or delayed shipments

It can have ripple effects across your entire

Future shipments may be jeopardizedWhen you don’t pay your tariff, the CBP may seize future shipments or blacklist your company, potentially barring or delaying future imports

Having a prior claim on a customs bond may also make it harder to secure a new one in the future, which could also hinder your ability to import. relationships may sufferIf you have a record of not paying import duties and other costs, your relationships with suppliers, logistics partners and customs brokers may be tarnished

And if unpaid tariffs result in delayed shipments, customers may be reluctant to do with you again. » MORE: How will Trump’s tariffs impact small es

Here’s what to do if you can’t cover your tariffConsider these options if you’re facing a steep tariff you may not be able to afford

Estimate your potential tariff bill ahead of timeThe last thing you want is to be blindsided by a hefty tariff bill

Start by estimating what you might owe by using the Harmonized Tariff Schedule tool

Or, for best results, work with a licensed customs broker to help identify the correct tariff classification and associated fees for your order

Just keep in mind that the final amount will be determined by U

Customs when your goods arrive at a port of entry. 🤓Nerdy TipUse NerdWallet’s tariff calculator to break down tariff costs for any planned or in-transit shipments, as well as how those costs might impact your bottom line

You can also along with the tariff news using NerdWallet’s tariff guide

Explore short-term financing options lines of credit are flexible sources of funding that you can use to cover cash flow gaps or as an emergency fund

Having access to a line of credit can come in handy when you need to cover a high tariff (or any other unexpected bill)

If you don’t already have one and you need fast access to money, look to online lenders for quicker apval

Work with your supplierIf you have a good relationship with your supplier, consider negotiating terms that can help offset high tariff costs

It may agree to absorb some (or all) of the tariff and related fees, or agree to ship smaller quantities to minimize your upfront tariff exposure

Another potential option is to arrange a trade credit agreement, allowing you to defer payment to your supplier until you’ve sold some or all of the goods, which can help free up cash flow

Reassess your sourcing and pricing strategiesIf you can’t absorb the tariff costs and your supplier won’t budge on negotiations, consider sourcing from countries with reduced rates

Alternatively, you may need to raise your prices to offset the additional expense

If you go this route, be transparent with your customers the reason behind the increase to help preserve their loyalty

Use a bonded warehouseInstead of receiving your shipment and paying the tariff right away, you may be able to store it in a CBP-authorized bonded warehouse

This allows you to defer duty payments for up to five years, paying the current tariff rate only when goods are withdrawn

This can vide flexibility by giving you time to secure the necessary funds, wait for potentially lower tariff rates or even sell the goods before you pay the tariff

You can also re-export goods to another country without paying U

Import duties. » MORE: How small es can combat supply chain risks amid Trump’s tariff war the authorRyan BradyRyan Brady is a lead writer on the small- team at NerdWallet and authority on small- lending