The U.S. international trade landscape is currently undergoing significant discussions and potential reforms. Two major events have recently been in the spotlight: concerns surrounding cargo clearance in the event of a government shutdown, which fortunately did not materialize, and the ongoing discussions surrounding the renewal of the Generalized System of Preferences (GSP).
Cargo Clearance: Preparedness Pays Off
Despite concerns about a potential government shutdown affecting cargo clearance from partner government agencies (PGAs) like the FDA, EPA, and USDA, the situation was averted. While many had prepared for disruptions, with CBP employees ready to work without pay to ensure cargo clearance, the continuity of government operations ensured a smooth flow of trade.
The Venable law firm’s international trade group had expressed concerns about the potential impact on PGAs, which could have resulted in “slower clearance of shipments subject to review.”
The proactive measures taken by stakeholders in the trade industry, from importers to logistics companies, showcased the industry’s resilience and preparedness. The National Customs Brokers & Forwarders Association of America (NCBFAA) had even downloaded the full Harmonized Tariff Schedule as a precaution, highlighting the lengths the industry was willing to go to ensure uninterrupted service.
Shippers will remain on high alert over the course of the next few months, hoping that another shutdown will be avoided before we hit Thanksgiving. For more information on shutdown trade impacts, here’s a 2023 Government Shutdown Agency Information PDF from the American Association of Exporters and Importers.
GSP Renewal: A Focus on Tariff Reductions and Reforms
The Generalized System of Preferences (GSP) remains under review, with a strong emphasis on reducing tariffs, especially in the current inflationary environment. The GSP’s expiration three years ago had led to increased duties for companies, emphasizing the financial implications of the program’s discontinuation.
Key insights from the International Trade Today summary on the GSP hearing include:
- The GSP aids companies in diversifying production away from China.
- There’s a push to add more HTS numbers, especially for footwear and apparel.
- Some stakeholders, like the United Steelworkers, are advocating for an increase in the Rule of Origin (ROO) to make GSP access more stringent.
- There are calls to either remove or increase competitive need limits.
- A longer-term renewal, preferably for at least five years, is being proposed to bolster confidence in the program and enhance the U.S.’s reliability as a trading partner.
- Clear eligibility requirements, encompassing labor, human rights, environmental standards, and more, are being discussed.
As always, M.E. Dey will keep our customers and partners informed of any new developments.