CBP 'Powerless' to Influence Policy in Trump Administration, Customs Expert Says
The chaotic situation that importers and customs brokers have been facing as tariff policy swings wildly from one extreme to the next is partially due to the fact that CBP is unable to influence policy in the Trump administration, Pete Mento, director of customs and international trade at DSV, said on May 8. Decisions about tariffs are made without expert insight into how their actual implementation will affect the broader trade community, he said.
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"What has been surprising to me, at least, as a spectator of what's going on in Washington, is the small number of people who have been responsible for these policies," Mento said at an Automotive Industry Action Group event. He said that while the secretaries of commerce and the treasury, White House trade adviser Peter Navarro and the president are making sweeping policy decisions about tariffs, there has been no "inclusion of government agencies" like CBP, FDA or the Bureau of Industry and Security that "deal with the enforcement of the changes."
The exclusion of the agencies that implement the policies the White House is making means that enforcement is playing catch-up with policy, which Mento said is exemplified by the executive order that recently clarified tariff stacking when it comes to the Section 232 steel and aluminum tariffs (see 2504290026). Typically, when a major policy like that is unveiled, customs brokers contact "the folks at CBP" for clarification, but this time: "we got a lot of shoulder shrugs. We got a lot of, you know, that's not my department. ... 'Could you put that in writing, please?' No, I can't do that." He said that, in this administration, clarification about "execution of policy" only comes from the White House.
Mento said that "members of CBP" and "folks back in D.C." have told him that the White House is conducting policy this way "because they were worried about leaks." Policy is decided at the top and not revealed to executive agencies until the last minute so that it would not get out to the press "because it would make it difficult for them, it would erode their position as a negotiator if more information got out."
"OK, great," Mento said. "Well, in the interim, we have dozens of clients who have made incorrect tariff decisions, overpaying or underpaying their tariffs, and now we're having to make sweeping corrections for them on their behalf." He said that this is "a customs-wide issue," which is causing a "lack of insight into enforcement." The trade community is making complaints about the way policy is implemented, he said, "but it would appear that CBP is powerless to insert themselves in the conversation."
At CBP's Trade and Cargo Security Summit in New Orleans May 6-8, Mento said that there has been "a noticeable lack of both cooperation, communication and answers" from the CBP officials there. While customs brokers are "getting inundated ... with information about what a great job customs believes they're doing," they aren't getting dialogue.
Though CBP is reluctant to communicate, Mento says they have no hesitation when it comes to enforcement: "I've never seen Customs more on their game than I have been [seeing] for the past couple of months. The efficiency with which they're using analysis is incredible." He said that this is part of a broader approach to streamline the enforcement process through use of AI in order to impact trade policy; cracking down on transshipment is a major policy concern of U.S. Trade Representative Jamieson Greer, "a man who sincerely believes that there's a lot of circumvention" within imports to the U.S.
As enforcement becomes more efficient, the concept of a U.S. External Revenue Service that forces "foreign suppliers to pay their tariffs prior to export," becomes more viable, Mento said. He described this as "the nuclear option" but one that the Trump administration is actively exploring. The potential "disruption that [this] would cause, would probably make people think about not buying goods" from affected countries, he said.
Mento concluded with advice for importers and brokers: "Look for opportunities to make your supply chain more resilient, to not have your eggs all in one basket, but to also use the size of your business to try to impact trade policy wherever that's possible, work together, like the group is here today, on making people understand in Washington how it's impacting your business, but you don't have to be a victim from it."