In this most uncertain of times, one is mindful of the president-elect’s stated preference to make “unpredictability” one of the hallmarks of his campaign. Therefore, prognosticating on which of his many protectionist positions are likely to materialize in the form of actual trade restrictions is difficult at this point.
The threat to impose an additional 45 percent duty on Chinese imports, the withdrawal from or revision of our various free trade agreements, such as the North American Free Trade Agreement, the Central America Free Trade Agreement, and even withdrawal from the World Trade Organization were proposed. The Republican party, traditionally more pro-business and “free-trade” oriented, is now in control of both houses of Congress, where many members facing re-election in 2018 may not be willing to risk alienating Trump’s supporters.
Even before the election, however, in its mission to balance trade facilitation and enforcement, it was becoming increasingly clear that US Customs and Border Protection was pivoting more toward its enforcement function.
The Trade Facilitation and Trade Enforcement Act provided CBP more robust tools for trade enforcement in the form of enhanced anti-dumping/countervailing duty “evasion” investigations, elimination of the “consumptive demand” exception to forced labor prohibitions resulting in “withhold release orders,” increased scrutiny of new and foreign importers of record, enhanced intellectual property rights training and enforcement, and establishment of an Interagency Center on Trade Implementation. CBP’s labored birth of the Automated Commercial Environment (electronic processing) has all but eliminated paper documents for entry and release of cargo, but still must integrate entry requirements of other government agencies.
Most telling of CBP’s new enforcement focus has been “informed compliance letters” issued to many importers reminding them of their compliance obligations on pain of decreased leniency in allowing “prior disclosure” (and penalty avoidance) for errors discovered during audits. Internal customs compliance audits will be the order of the day.