Trade Compliance

GHY discusses changes to international trade regulations and explores cutting-edge compliance strategies.

U.S. Government Shutdown Update

Posted January 09, 2019

As the partial shutdown of the U.S. government heads for a record-breaking third week with no breakthrough in sight, the implications of the lapse in appropriations are beginning to manifest in various ways that are having an impact on the trade community.

Trump's Border Wall --> Government Shutdown

U.S. Customs and Border Protection

While the essential border clearance functions of CBP remain largely unaffected by the “funding hiatus,” other less obvious services are no longer being delivered. For example, changes to the Automated Customs Environment required to implement the Section 301 tariff exclusions recently approved by the U.S. Trade Representative are not being made, meaning that importers must continue paying the additional 25% tariff on certain imports from China even though they have been granted duty relief. As indicated previously, a range of other “non-essential” functions such as planning, research, policy administration, auditing, training, and regulatory affairs have all been suspended for the time being.

U.S. Department of Commerce

Functions of Commerce have been curtailed significantly by the shutdown. Among other things, it has ceased processing requests from importers to be excluded from the Trump administration’s steel and aluminum tariffs. Already mired in confusion and facing an investigation by the General Accounting Office, the Section 232 exclusion process currently has a backlog of more than 9,000 requests for duty relief still pending. The department had been looking to introduce an online portal to streamline the processing of requests, but that work has stopped, as too has all maintenance of its website.

Staffing has been eliminated for both new and ongoing investigations into whether to impose anti-dumping or countervailing countermeasures on foreign exporters found to be selling their products into the U.S. at unfairly low or subsidized prices. The department’s Bureau of Economic Analysis and Census Bureau is also not publishing international trade or economic data during the shutdown.

International Trade Commission

The USITC has been largely shuttered and most of its 400+ employees have been furloughed. As a result, the following activities have been suspended: investigative activities, including proceedings under sections 332, 337, and 201, and Title VII of the Tariff Act of 1930; maintenance of the Harmonized Tariff Schedule of the U.S.; technical assistance to the USTR and Congress, as well as all other government functions other than those directly supporting active litigation to which the USITC or the United States is a party. Additionally, the work stoppage could jeopardize the commission’s March 15 deadline for submitting a report on the economic impact of the new US-Mexico-Canada Agreement, which could delay Congress taking action on ratification of the deal as many lawmakers will be looking to USITC’s assessment to inform their positions.

U.S. Department of Agriculture

USDA has advised that it will extend the deadline for farmers to apply for assistance to offset losses they were experiencing as a result of trade tensions between the United States and other countries. Applications were due January 15, but the department's Farm Service Agency, which operates the program, closed on December 28 after the agency ran out of funding because of the shutdown.

A substantial number of international programs other than inspection of imports and certifying products for export have been suspended in accordance with the USDA’s shutdown plan, as too have regulatory programs related to domestic and international inspection, enforcement, equivalence, and auditing policies.

Various reports that farmers rely on when planning for planting and harvesting will also be delayed. The USDA says that new dates for the Monthly World Agricultural Supply and Demand Estimates report and other data originally scheduled for this Friday (January 11) will be set once government funding is restored.