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U.S Government shutdown expected to disrupt trade activity

A partial shutdown of the United States (U.S.) government seems likely unless the Republican-controlled House of Representatives and the Democratic-led Senate reach an agreement on spending bills for fiscal year 2024 by September 30, 2023. If this does not occur, more than 400 U.S. government agencies will suspend their normal operations starting on October 1, 2023, which will force non-essential federal government workers into furlough and disrupt various services critical to trade.

The potential government shutdown could impact a number of agencies responsible for key trade and transportation services, including U.S. Customs and Border Protection (CBP), the Department of the Treasury's Office of Foreign Assets Control (OFAC), the Department of Commerce's Bureau of Industry and Security (BIS), the Department of State's Directorate of Defense Trade Controls (DDTC), the Department of Transportation (DOT), the Census Bureau (Census), and the Federal Maritime Commission (FMC).

Using the 2018-2019 government shutdown as a comparator, and based on published contingency plans recently issued by U.S. government Agency Contingency Plans | OMB | The White House, the following impacts can be expected:

  • Federal government activities related to imports, including tariff exclusion request processing, antidumping duty and countervailing duty investigations, and other regulatory and administrative activities, will likely cease.
  • U.S. CBP is expected to continue cargo processing and inspections at the U.S. ports of entry; security screenings and revenue collection; and enforcement activities related to alleged antidumping duty and countervailing duty evasion pursuant to the Enforce and Protect Act. By contrast, policy, regulatory, legislative, auditing, and training activities will likely be suspended.
  • Processing by Partner Government Agencies (PGAs) involved with processing imported merchandise is likely to be affected, including the U.S. Environmental Protection Agency, U.S. Food and Drug Administration, and U.S. Department of Agriculture.
  • The impact of a federal government shutdown on the transportation sector will vary between agencies and modes of transportation.
  • There is likely to be a suspension of processing for export licensing applications, commodity classification requests and other services offered by U.S. BIS.

The length of the impending government shutdown remains uncertain, with past shutdowns having lasted from one day to more than four weeks.

Topic(s)

International Trade and Border Management

Information source

U.S. Customs and Border Protection (CBP)
Disclaimer

The foregoing information is provided for informational purposes only and is not intended as, nor should it be considered, professional advice or a substitute for conducting your own thorough research and review. Before making any decisions or taking any action based on the information provided, you should conduct your own independent investigation and/or seek professional advice from a qualified expert in the relevant field. The CSCB disclaims all liability for actions taken or not taken based on the information provided.