Trump Trade Policies Could Impact Brokers, But New Opportunities Possible, NCBFAA's Kent Says
The prospect of punitive tariffs and a renegotiated NAFTA could significantly impact customs brokers, but some could see benefits from U.S. leverage in any NAFTA withdrawal talks and potential port investments under the Trump administration, National Customs Brokers & Forwarders Association of America Legislative Representative Jon Kent said during a Nov. 22 webinar. The required six-month window between submitting a withdrawal notice to NAFTA members and actual departure could give Trump an advantage in promoting U.S. interests, potentially spurring flexibility from Canada and Mexico during talks, Kent said. “It may not be enough, he may want to go further, and they’re willing to take it,” he said. “Having the ability just to shut down the agreement may provide him some edge. I think he’s well known as a negotiator, and I think this may be part of that inclination.”
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Kent also mentioned the Trump team's aversion to the regulatory initiatives under the Obama administration, adding that brokers have noticed a “strong regulatory inclination” under the current administration to ratchet up import information collection by partner government agencies (PGAs). Rules recently put out by the National Marine Fisheries Service (NMFS) and the U.S. Fish and Wildlife Service (FWS), for example, have indicated that the current executive branch wants to expand the amount of import information it demands, Kent said. Trade groups have expressed concern about FWS’s approach to ACE (see 1611210004).
Recently, PGAs have signaled that they primarily view the International Trade Data System (ITDS) as a vehicle for gathering additional information and data, and that they will “push the edges” of what they will require through ITDS in the future, he said. “I think there will be some pushback on that, and there has been pushback from NCBFAA on that score, so I think that’s one area where we’re in harmony” with the Trump transition team, Kent said.
While presidents appear to have broad authorities to withdraw from trade agreements, including NAFTA, litigation likely would ensue, Kent said. Congress would also have to revise all NAFTA implementing legislation after an executive withdrawal, Kent said. Trump’s pick for the Office of the U.S. Trade Representative transition, former Nucor CEO Dan DiMicco, signals that the upcoming administration won’t expand current U.S. trade negotiations, Kent said. Trump’s pick of Rolf Lundberg, from the U.S. Chamber of Commerce, to the transition team may help counter the protectionist sentiments backed by others on the team, Kent said.
New customs legislation seems unlikely, as the February passage of the Trade Facilitation and Trade Enforcement Act (TFTEA) seemed to convince CBP that “the bridge had been crossed from facilitation to enforcement,” which will be “further fueled” under the Trump administration, Kent said. “It will be an interesting matchup between House Democrats and the new administration, perhaps contrary to the interests and the efforts of the [House] Speaker [Paul Ryan, R-Wis.] and of House Republicans and Senate Republicans … in an effort to use CBP as a tool for constricting importations of goods,” Kent said. Congressional Democrats were largely responsible for inclusion of forced labor provisions in TFTEA, he added.
During his campaign, Trump signaled a substantial focus on revitalizing U.S. infrastructure, including ports, bridges and roads, which could bode well for the trade community, Kent said. Still, much of the trade community and congressional staff remains unsure as to how the Trump administration will impact U.S. trade policy, Kent said. When he visited Capitol Hill just after the election, aides said they couldn’t predict any trade effects from the election.