The Global Entry with Thomas Taggart — A bi-weekly column on navigating global trade, ecommerce, and compliance in a changing world

Read also: The Future of Cross-Border E-Commerce in Emerging Markets

After years of operating quietly in the background, the U.S. Non-Resident Importer (NRI) program is suddenly in the spotlight. Once a little-known mechanism for enabling foreign entities to import goods without a U.S. presence, NRI has become a flashpoint in trade policy — especially as the U.S. clamps down on duty-free de minimis shipments and ramps up tariff enforcement.

For e-commerce brands and global merchants alike, the rules of engagement have changed. Understanding how the NRI framework works — and how it’s evolving — is now critical to maintaining access to the U.S. market.

From Regulatory Footnote to Policy Flashpoint

The NRI framework, established under the Tariff Act of 1930, has long allowed foreign businesses to act as Importer of Record (IOR) without setting up a U.S. entity. Historically, it served traditional B2B trade: a foreign company could import by appointing a U.S. resident agent and posting a customs bond — procedural steps, not policy controversies.

That all changed with the rise of cross-border e-commerce. What was once a niche mechanism became a mainstream strategy as online shopping accelerated globally. Millions of overseas merchants adopted NRI status to sell on marketplaces and hold unsold inventory in the U.S.

Amazon FBA and the Rise of the Foreign Seller

Amazon’s Fulfillment by Amazon (FBA) program turned NRI from a technical footnote into a mass-market enabler. FBA created both opportunity and necessity: to reach Prime customers with fast delivery, foreign sellers needed to pre-position inventory in U.S. warehouses. But Amazon doesn’t act as the Importer of Record — that responsibility falls on the seller.

Enter the NRI solution. By securing a CBP-assigned importer number and a surety bond, foreign sellers could import inventory into U.S. fulfillment centers — without forming a U.S. entity or maintaining domestic assets. Today, Chinese and Hong Kong sellers are estimated to make up more than 60% of all third-party sellers on Amazon.

This boom also fueled an entire service ecosystem: bundled “FBA importer packages” offering NRI setup, resident agent services, surety bonds, and customs filings marketed directly to global merchants. For many Chinese sellers, the path from factory floor to Amazon warehouse became remarkably streamlined.

Meanwhile, the 2016 increase in the de minimis threshold from $200 to $800 — and the 2019 introduction of Type 86 entries — opened the door for another surge in direct-to-consumer shipments. Platforms like Shein, Temu, and AliExpress built business models around duty-free entry, accounting for an estimated 30%+ of all U.S. low-value package shipments by 2022.

But with the de minimis program now suspended, those models are in crisis — and the NRI system is under renewed scrutiny as a workaround for foreign merchants to evade U.S. duties.

De Minimis Ends, Tariffs Rise, and Scrutiny Grows

On August 29, 2025, an executive order suspended de minimis treatment for all countries. Overnight, every inbound parcel — regardless of value — now requires a full customs entry and duty payment. For millions of foreign merchants, the door that once bypassed customs clearance has effectively closed.

At the same time, tariffs are rising sharply: reciprocal duties between 10% and 41%+, plus additional Section 301, 232, 201, and anti-dumping/countervailing measures. CBP audits have increased by more than 150% year-over-year, with growing attention on undervaluation, misclassification, and transshipment.

The convergence of these pressures has forced thousands of foreign sellers to seek alternative import pathways — often with questionable results.

The Workarounds: “Modified DDP” and Compliance Risk

As duties and oversight rise, a parallel market of workarounds has emerged. Some overseas suppliers now offer to ship on “Delivered Duty Paid” (DDP) or so-called modified DDP terms, effectively acting as the Importer of Record through NRI status.

In these arrangements, the foreign manufacturer — not the U.S. merchant — declares the import value to Customs, often far below the true transaction value. Some industry executives estimate that “modified DDP” transactions now make up roughly 10% of all U.S. imports.

While marketed as convenience and cost savings, the risk is real. When duties are underpaid or declarations are falsified, liability can extend to the U.S. buyer. Both CBP and the Department of Justice have warned that U.S. companies won’t be immune from enforcement simply because their supplier “handled the import.”

In short: when a deal sounds too easy, it usually is.

The Collectability Crisis

At the heart of Washington’s concern lies one word: collectability — CBP’s ability to recover unpaid duties and penalties from foreign importers with limited or no U.S. presence.

When a U.S. company defaults, CBP can seize assets, pursue claims, or collect through domestic legal channels. But with NRIs, options are limited: the bond is the only real security, and resident agents aren’t financially liable.

The math doesn’t work. A foreign merchant importing $1 million in goods with a 50% tariff owes $500,000 in duties — ten times the minimum $50,000 bond. If they default, the surety pays only that bond limit, leaving the rest uncollected. CBP has documented cases of “ghost importers” that rack up debt, dissolve, and reappear under new names.

A Lenient Framework by Design

The U.S. NRI model stands out for its leniency. Unlike the UK and EU, which require a co-liable “Indirect Representative” who has a physical presence in the market to share financial responsibility for customs debt, the U.S. relies solely on the importer’s bond. Brokers act as agents, not guarantors.

This structural gap is now at the center of proposed reforms. Lawmakers argue that the absence of a co-liable representative has enabled undercapitalized foreign sellers to operate in the U.S. market with little accountability — and left CBP with limited recourse when duties go unpaid.

Legislative and Industry Pushback

Reform is gaining bipartisan momentum. The Leveling the Playing Field 2.0 Act (H.R. 1548/S. 691), introduced earlier this year, would require NRIs to maintain U.S. assets sufficient to cover potential duty liabilities and post enhanced bonds — with exemptions for C-TPAT Tier 2/3 participants. Violations could trigger penalties up to $50,000 per shipment or 50% of shipment value.

Separately, Senator Bill Cassidy is considering legislation that may go further, seeking to eliminate NRI eligibility for most foreign merchants except those in Canada. Trade groups like the Alliance for Trade Enforcement are also urging the U.S. to end NRI authorization altogether and require domestic Importers of Record or joint-liability structures.

The August suspension of de minimis privileges amplified these calls, revealing just how deeply foreign NRI operations are now embedded in U.S. e-commerce — and how fragile the current system has become.

Pathways Forward for Foreign Sellers

For legitimate merchants and platforms, adaptation is key. Several practical pathways exist:

• Use an Importer of Record Service: Partnering with a licensed IOR service provider adds cost but provides accountability and smoother compliance. 
• Leverage In-Country Fulfillment: Combined with an IOR service, import inventory in bulk to U.S. warehouses, paying duties on cost-of-goods rather than retail prices to reduce per-unit costs. Research shows that 94% of ecommerce leaders plan to expand in-country fulfillment within five years. 
• Join Trusted Trader Programs: C-TPAT certification and similar initiatives may offer safe harbors under future legislation and demonstrate a proactive compliance posture. 

The New Reality

The NRI pathway that helped fuel global e-commerce growth isn’t closing — but it’s narrowing. The U.S. is shifting from permissive growth to accountability and enforcement.

Foreign sellers, especially those that once relied on de minimis exepmtion and lenient import programs, face new complexity and cost. But those who view compliance as an investment — not an obstacle — can turn this moment into a competitive advantage.

The door to American consumers remains open. It’s just no longer frictionless.

Author Bio

Thomas Taggart is VP of Global Trade at Passport, a leading global ecommerce solutions provider helping brands like Ridge, HexClad, and Wildflower Cases scale globally with cross-border shipping, expert compliance support, and in-country enablement services. To learn more about Passport, visit passportglobal.com. The Global Entry with Thomas Taggart is a bi-weekly column in Global Trade Magazine covering the strategies, regulations, and insights shaping the future of cross-border commerce.