Since the Trump administration issued the “Strengthening Customs Enforcement” executive order in early June, apparel executives have been attempting to determine what it means for sourcing and how they can prepare to comply. While short on details, it sends a clear signal about U.S. Customs and Border Protection’s focus and intentions going forward and outlines a far more aggressive approach to importer oversight, supply chain transparency and enforcement.
The EO outlines a phased in approach to the new enforcement, taking place over the next 90 to 180 days but armed with the information already available, Vincent Iacopella, chief strategy officer of global logistics firm and customs broker Alba Wheels Up International, says companies should already be reviewing importer-of-record structures, validating supply chain documentation and communicating the new disclosure requirements to suppliers. Further, he says don’t be surprised if some of the enforcement kicks in immediately as the government begins to step up enforcement on regulations already on the books.
Here, Iacopella lays out what we know, what’s still to be determined and how to prepare.
HGI: The Trump Administration issued an Executive Order about a month ago dubbed, “Strengthening Customs Enforcement.” What are your takeaways from that and what should apparel executives focus on?
Vincent Iacopella: At a high level, there’s quite a lot in there. There is not a lot of detail about what it all means yet, but they do nod to certain places they want to go. There’s definitely more scrutiny for U.S. importers of record, possibly additional compliance data submissions, business affiliation disclosures, beneficial ownership, domestic asset requirements, things like that. Also, the restrictions on foreign importers of record include limiting the types of entries they can do, additional controls on foreign importers of record that are using formal entry, greater financial assurances and higher compliance oversight. They’re talking about a good standing requirement where importers with significant compliance issues, enforcement actions, payment of liabilities and other key considerations potentially could lose the right to import goods into the U.S. Again, there’s not a lot of structure about how this will be enforced or when.
There’s a big focus on increased supply chain transparency. We’ve already seen a trend in ‘22 with the Uyghur Forced Labor Prevention Act, but picture that greatly expanded [with] additional supply chain manufacturing data. At a high level, importers should definitely anticipate expanded disclosure requirements, such as supply chain data, product level information, certifications and a potential submission of export documentation filed in a foreign country.
HGI: What’s the timeline for getting some clarity and some specifics around a lot of this?
VI: The EO was signed on June 3, 2026. It’s not immediately self-executing, so there’s no immediate requirements. It does direct the Department of Homeland Security and Customs and Border Protection to implement rulemaking and policy changes. The practical takeaway is between now and 90 days, you can see enforcement tightening on penalties, audits and vetting, and then 90-180 days might be structural changes to the right to make entry or the importer of record qualifications. There’s a lot of talk about a full regulatory enforcement regime likely to go live post 180 days.
I do want to concentrate between now and 90 days, because we are seeing a focus on the right to make entry. They don’t need new regulations to do that because they are enforcing existing regulations with more rigor and more focus. So that’s important, because some of the things they want to do in this executive order, there’s already authority for some of it.
HGI: What’s your perspective on how much of the industry will be directly impacted by what’s planned in the next, let’s call it 90 days, or what there’s already authority over?
VI: There are certain things that everybody should be doing. Logic will tell us that those importers who are non-resident importers and those importers that may have had repetitive issues on compliance can expect that there’ll be a higher level of scrutiny before and after.
But there are things that even compliant importers in apparel should start to look at. For instance, review your current importer of record structure, especially if you have a non-resident model. Look at customs bond sufficiency, which are the changes around customs bonding, validating supply chain documentation, conducting health checks for valuation, classification, origin and forced labor exposure. Those are things that everybody should and could do.
Foreign supplier export documentation will be required at a certain point, so determine if you have the system set up internally to do it, if you have the buy-in from the supplier to do it and if the supplier is allowed to do it in their origin country.
Then there’s the question of whether audits go up on low-risk imports. And if so, how do you know it’s going to be post-entry audits? It could be that there’s technology now that allows this analysis before the goods are released, which is really going to inhibit your go-to market.
HGI: Is there a chance that the factory would not be on board with furnishing that export information? And how would that work?
VI: There is always a possibility that a factory may be reluctant to provide some information, particularly if it considers the information proprietary or is unfamiliar with the process. In most cases, however, suppliers maintain records and can provide the necessary data when there is a clear business purpose and appropriate confidentiality protections in place.
The process could involve obtaining the supplier’s agreement upfront, clearly defining the information required, and ensuring that the data is used solely for its intended purpose.
HGI: When we talk about rules around who can be the importer of record, how onerous is that going to be or is it just a matter of your importer now has to have some sort of office here in the U.S.?
VI: I don’t think it’s the latter, because there’s a genuine concern that it’s harder to enforce certain things with nonresidents. If there is an entity in the United States, the question may become what is the nature of the structure? Or is it just to facilitate the transaction or is it driving other value? Is it a real U.S. subsidiary? I don’t know. There could be companies out there that might have some issues if there’s a requirement that there be assets in the U.S. that have to serve a specific function.
HGI: What’s the takeaway for apparel firms doing business in the U.S.?
VI: What’s challenging about the last two years on trade policy and the geopolitical stuff is the lack of predictability, and the policy being made in real time on some of these issues. You have to stay agile, but you have to stay organized in your execution and response to it.
But what do we know? We had been going into this enforcement-minded environment before the executive order. The executive order has been one of the most blatant articulations in specifics. [The government] is really starting to coalesce around specific issues and specific risks.
We know that supply chain transparency past the first tier has been on the menu for UFLPA, and then we said it’s going to go to China origin. Will USMCA [United States-Mexico-Canada Agreement] have a China origin component? Will there be other financial obligations about the suppliers in USMCA from Mexico? You know it’s going in that direction on transparency. You know just dealing with the seller is not enough anymore. You know that there are a couple of people out there, including us, that have mapping solutions to this, and they have de-risking solutions to this.
The non-resident importers knew for about a year that something was going to happen there. We knew for a while that there’d be something happening with e-commerce.
What was surprising was how much of all that was in one EO, and the focus. So, the lesson to learn is that there’s some things you do know that you have to get better at.
HGI: In addition to working with a team like yours, what types of roles should apparel companies be hiring in house right now to deal with all of this? What’s the skill set?
VI: Leverage the partnerships—your broker, your suppliers. Make sure your trade attorney has a good strategy. You really need all of the parties in the chain to sign off on this strategy. I wouldn’t go out and hire a whole staff of people to do this because there’s tools you can use. Leverage those tools and your team. But to do all this in house or manually is impossible.
