Welcome to Weise Wednesday! Twice a month we will share a brief Q&A with the former U.S. Commissioner of Customs, Mr. George Weise. If you have questions, we encourage you to send them to This email address is being protected from spambots. You need JavaScript enabled to view it..

 

Q. Can you discuss the most recent government shutdown and its impact on CBP and the trade community?

A. The current “partial” government shutdown impacts about 25% of total government discretionary spending because Congress had already passed full-year appropriations for five of the twelve appropriations bills pending. The seven bills affected by the shutdown include Agriculture, Commerce-Justice-Science, Financial Services, Homeland Security, Interior-Environment, State-Foreign operations, and Transportation-Housing and Urban Development.

Unfortunately, from a trade perspective, the shutdown impacts virtually all trade agencies, including U.S. Customs and Border protection (CBP), the Department of Commerce, the Office of the U.S. Trade Representative, and the U.S. International Trade Commission. 

In a shutdown, affected federal agencies must discontinue all non-essential discretionary government services until new funding legislation is passed and signed into law. Essential services and mandatory spending programs continue to function. 

While designated “essential” employees stay on the job, “non-essential” employees are furloughed. No employees, however, are paid during the shutdown period. In past shutdowns, legislation was subsequently passed to provide retroactive pay for both furloughed and non-furloughed workers. That is likely to be done again in this case when the shutdown ends, but there is no guarantee. 

Fortunately, like in past shutdowns, the adverse impact on trade has been limited because CBP designated nearly 90% of its employees as “essential.” It kept its personnel in place at land, air, and sea borders and between our ports of entry to carry out its important responsibility of securing our borders and keeping legitimate goods and people moving. Administrative and headquarters personnel were deemed “non-essential” and furloughed.

The shutdown, which began at midnight on December 21, 2018, when the Congress failed to enact legislation to fund the programs covered by these appropriations bills, is now the longest running U.S. government shutdown ever. Affected government workers are about to miss their second paycheck in a month, and morale is naturally eroding. Unfortunately, the President and Democratic leadership in the Congress seem to be at a complete standoff over funding the building of a wall on the southwest border, and no resolution of the conflict appears to be in sight.

 

What trade professionals should expect during the shutdown

Looking forward, the trade community should expect to see consequences from the shutdown such as delayed responses to requests for rulings and resolution of protests and delays regarding in-bond enforcement. It should also be expected that upcoming trade events, such as COAC meetings, are likely to be cancelled or postponed. Nor will the CBP website be actively managed during the shutdown. Consequently, transactions submitted via the website are not likely to be processed, and responses to inquiries should not be expected.