Here at RM Custom House Brokers, Inc, we work with many business and enterprise owners that engage in the international market every day. The worldwide supply chains and trade laws and interactions have never been more complex and the year 2020 has certainly held many surprises. Aside from the many unforeseen adjustments that had to be made as medical experts tried to get a grip on the pandemic and figure out how to curtail its spread, custom brokers have also been subject to several changes in laws and regulations during the year. So let’s take a wide overview as to some of the things that have been happening in the world of imports and exports.
As the Brookings Institute points out, coronavirus has and is affecting important exports in the U.S. Imports seem to currently be the hardest hit. The United States actually does a little more importing than it does export, so when both decrease, this has a greater effect on the importation of goods. The gravity of the economic recession has still not come into full effect, but as things look so far, it seems the U.S economy was greatly hit compared to other trading partners.
Exports were down 16 percent in the first half of the year, which is not uncommon in a year of a recession but still has considerable impact. That 16 percent, however, is spread out across many different industries. People often think of imports and exports as just goods, but the U.S actually exports a lot of services. These are included foreign exchange students that come over and spend money to go to university here, have meals here, pay for lodging, etc. Other export services also include financial services and telecommunication services. Those have not been impacted nearly as much. The reasons can seem pretty clear in the sense that the uncertainty of universities opening back up puts a considerable damper on foreign exchange students wanting and able to come over and establish a couple of years of spending in the country. Services that can provide accommodations in terms of serving clients remotely fare differently.
The trend in other areas of exports like manufacturing is not all that different. Two of the country’s biggest exports—aircraft and automobiles—are down about 30 to 40 percent. Agricultural exports are also down. All of these effects have led to changes in how the U.S does business.
As customs brokers, we know that rules and regulations are subject to change. Different administrations have different ideas about trade and how to handle and maintain our trade relationships. The last few years, for example, have been preoccupied with a lot of talk about trading with some of our bigger adversaries like Russia and China. In recent months, the relationship with China has been particularly tense.
Perhaps one of the most pronounced changes that have come to fruition in later months has to do with the U.S trade relationship with China—which has been contentious since Trump came into office. Some economists have claimed that the United States trade war with China has caused economic damage to the U.S without solving some of the underlying issues. The U.S efforts to try to combat intellectual property theft among other things. Some studies have pointed out how U.S companies ended up primarily paying for these newly imposed U.S tariffs with costs estimated up to $46 billion dollars. The trade wars calmed down when the two sides declared a truce in January of 2020.
Since the coronavirus fiasco, U.S trade laws with China are likely not to soften. The year 2020 has brought many changes to the world of imports and exports but people continue to go about their business and we are here to help those importers and exporters continue their livelihoods.
Here at RM Customhouse Brokers, we work with many different types of exports and importers and help them meet compliance and CBP regulations so that they can do business outside or in the United States.