The way it used to be:

• New tariffs and trade measures were announced in the Federal Register and went through a rulemaking process before becoming effective. This gave importers and customs brokers time to plan for the change.
• The customs compliance function in a company – if there was one – was not well known or appreciated by management.
• Customs duties were at reasonable levels and viewed as a cost of doing business.
• Doing research on a tariff classification could be a tedious process.

Things have changed! New tariffs, changed tariffs, and reduced tariffs are announced with short notice. The duties on merchandise can change while a shipment is in the middle of the ocean. The status of free trade agreements has become uncertain. New detailed duties are assessed on steel and aluminum and their derivatives. Artificial intelligence is playing an increasing role.

Welcome to the new world order!

Things are different for importers. The term “importer” has a broad meaning in this context as nearly every major manufacturing company uses imported materials and parts. The import function in these companies is often buried somewhere in the organization. 

Now with new tariffs and trade deals happening almost weekly (or daily), a company’s management of importing is suddenly looking at the effect of these tariffs on their bottom line. In some cases, the tariffs could potentially put them out of business. Management must now turn to the import function to understand the tariffs. Once obscure, the import compliance people have new visibility and importance. Hopefully, this means increased resources and salaries as well. 

Customs brokers also face some big challenges. Heretofore, their entry software could be updated periodically for changes in HTS numbers and to add new Antidumping cases. Now brokers have new Chapter 99 HTS classifications and duty rates frequently taking effect – often with little forewarning. Their software must be constantly updated to reflect these changes, or they have to make the changes manually.

These factors – combined with technology – may transform how customs clearances are done. Imagine a situation where a foreign shipper sends an EDI invoice with the part number and nomenclature of the articles in a shipment. An AI program instantly searches the HTS, CROSS, the Explanatory Notes to the HTS, the broker database and foreign customs records to find a classification for the articles, then prepares an entry for the shipment. It also pays the carrier, transfers funds to Customs for duty and fees and bills the client.  This all happens in minutes – or even seconds.

Where are the people in all this? It could be there aren’t any. When would such a program exist? Ten years from now? Nope – it either exists now or someone is working on it.

How about US Customs & Border Protection (CBP)? That agency is also hugely affected by all the changes. 

Like everyone else the CEEs and other CBP functions have to keep up with all the changes. Imagine the tasks confronted by the metals CEE. They need to become knowledgeable with all the Section 232 changes and detailed requirements for derivatives. Like other CEEs they have to know and enforce the changes in tariffs and all the other “deals” that seem to come down every week. If an Import Specialist is absent for two weeks, he or she will come back to a set of new rules that must be learned immediately. 

If the IEEPA tariffs are ruled unconstitutional by the Supreme Court, CBP will be tasked with carrying out a refund procedure involving thousands of entries and billions of dollars. That’s not the end of it. The Administration is likely to implement new tariffs under a different authority and CBP will have to collect the new tariffs and enforce the new rules.

Those are the new burdens on CBP. The agency has also been given marching orders to increase enforcement. With those orders come new tools. AI gives CBP a powerful enforcement tool. Imagine that CBP obtains a bill of material in response to a forced labor inquiry. A third-tier subcontractor is identified as being located in Xinjiang Province and using forced labor. That info is now in CBP’s database. CBP investigates another Chinese company and obtains a bill of material. AI will instantly identify if the same subcontractor appears on the bill of material and enable CBP to deny entry of the shipment. 

Don’t like change? Wishing for the “good old days”? Hoping for stability and set procedures? Maybe you need to find a different job.