US importers in limbo as chaotic Trump tariffs lack clear guidance

Business Standard

4 days ago

President Donald Trump entered office in January pledging to unleash prosperity by raising tariffs and cutting red tape. Six months later, the back-office systems connecting the US and global economies face their toughest test yet against an onslaught of both.
Importers, customs brokers and the broader logistics industry are bracing for a deluge of fine print on tariffs before Friday, when Trump has pledged higher country-specific duties amid a number of import taxes targeted at certain products and materials.
Hours before the deadline, key details needed to keep goods flowing and the paper trail compliant are unclear: What will dozens of still-unspecified levies be, will they apply to merchandise already in transit, and how and when will some of Trump's recent deals be implemented?
'If there is no formal notification before Aug. 1, does that mean the current rates are being assessed? The April 2 tariff rates? We don't know,' said Cindy Allen, chief executive officer of Trade Force Multiplier LLC, an international trade and customs consulting firm.
US Customs and Border Protection, the federal agency that enforces tariffs and the nation's trade laws, can't implement anything based on Trump's letters, Truth Social posts or administration fact sheets that have outlined his negotiated deals and unilateral pronouncements. CBP needs a more formal notice, such as an executive order or proclamation.
'Around the Clock'
After months of trying to keep up with quick-changing rules, the importers-of-record that actually pay tariffs — not US trading partners, as Trump often claims — worry about penalties and surprise bills that can run into the millions of dollars. For many, it's impossible to know where and when to send their next purchase orders, much less plan capital investments.
In addition to making customs declarations, brokers now 'are really in the weeds with advising clients in how to comply with the regulations and changing tariffs, but also looking at strategies on how to reduce the tariffs, mitigate the tariffs, delay the tariffs,' said William Jansen, head of customs brokerage at SEKO Logistics. 'It's around the clock.'
Once an official decree comes, CBP reprograms its software platform known as ACE — short for Automated Commercial Environment. Big companies typically have direct connections to ACE, while smaller ones often use customs brokerages. If the only update is to various countries' tariff rate, it could be an easy change.
'That's just updating one number with another. That can happen in a few hours,' Allen said.
What Trump has proposed for Aug. 1 is potentially far more complex than that — a patchwork consisting of new levies for nations and specific ones for certain goods like autos, steel and copper, as well as relief for goods under the US-Mexico-Canada Agreement. The customs software that went from just a few lines in Trump's first term are getting retooled overnight to handle dozens of tariff codes.
On Thursday, he announced a 90-day extension for Mexico, posting the news on his Truth Social page.
'Fully Equipped'
CBP says it's ready to enforce Trump's tariffs despite the ticking clock.
'Serving on America's frontline, CBP strictly enforces all laws and Presidential directives to secure our economic sovereignty,' CBP Assistant Commissioner Hilton Beckham said Wednesday. 'CBP is fully equipped and ready to implement and enforce the President's tariffs using all our legal authorities for tariff enforcement and revenue collection.'
At the same time, CBP is policing businesses more aggressively to ensure they classify their goods correctly, pay the appropriate amount in taxes and provide details on the country of origin, potentially right down to the component. Failure to comply can result in even greater fees and penalties.
'We're correcting customs every day on scenarios where they mistakenly requesting additional duty when it should be due. And I can't blame them. Their job has gotten more complicated too,' Jansen said.
Jose Gonzalez, president of the Washington-based National Customs Brokers & Forwarders Association of America Inc., said the industry expects to get specific guidance from CBP on Thursday, while some are also 'hoping for an extension.'
'We have a feeling they'll be ready – we just want to make sure they're accurately ready,' Gonzalez said. 'Sometimes they leave out details because of the fact that it's a live update.'
CBP has had to work out the details on the fly before.
Mollie Sitkowski, a Chicago-based trade compliance partner at Faegre Drinker Biddle & Reath LLP, has a client who owes several million dollars from taking an exemption they didn't know they were taking because customs software accepted entries it wasn't supposed to.
'Customs didn't keep up with it, the broker didn't keep up with it and the importer didn't even know it was happening,' she said. 'Then at the end of May, customs comes back and says 'you owe this money.''
A similar situation is playing out with the aluminum and steel tariffs, which went live before the details on derivatives and components were hashed out.
Importers are doing their best to hedge against the turmoil, according to Eytan Buchman, chief marketing officer at Freightos Group, which runs a cargo booking platform. 'Plenty are breaking loads into pallet-sized or airfreight moves instead of full containers to dodge the cash-crunch of one big customs bill,' he said.
Importers must show they took 'reasonable care' to interpret the tariff rates and apply them to their shipments. Tom Gould, CEO of Tom Gould Customs Consulting Inc. in Seattle, said 'importers are struggling more today with understanding the rules than they are with paying the tariffs.'
Trump's unpredictability makes it tough to plan.
'I type an email to a client with a certain percentage and it makes me look like an idiot because before they've even read it, he's said something else,' said Paul Diedrich, director of trade services at Ardent Global Logistics, whose clients are mostly small- and medium-sized business.
Diedrich said he's part of an informal support group with a handful of brokers and trade attorneys that wanted a 'safe place to vent.'
US PREVIEW: IEEPA Takedown? Trump's Favored Trade Weapon at Risk Meanwhile, a federal appeals court is holding a hearing Thursday on the legality of a huge swath of tariffs that Trump justified by invoking emergency powers, including the country-by-country rates due out Friday.
If those are ultimately ruled illegal, CBP will likely need to issue refunds for all revenue collected under the so-called reciprocal tariffs, though the process for doing so is unclear.