U.S. Customs Sees Dropoff in External Revenue Month Over Month

United States Customs and Border Protection (CBP) released its monthly report Wednesday, detailing the progress it made last month. And for the most part, its seizure and revenue metrics have declined.

Though it completed a similar number of audits in February as it did in January, the yield from those audits proved to be markedly less than they were in the previous month. 

In January, CBP completed 30 audits that flagged $71 million in outstanding duties and fees, but in February, 28 audits found $2.9 million in unpaid duties or fees, down 96 percent from January. Those duties and fees come from “imported goods that had been improperly declared in accordance with U.S. trade laws and customs regulations,” per CBP’s report. 

In its February report, the agency noted it had “collected over $74.5 million of this identified revenue and from previous fiscal years’ assignments.” In January, that figure stood at $703 million, which means that, month over month, that revenue stream decreased by about 90 percent. 

External revenue wasn’t the only metric that saw a double-digit drop in February, when stacked up against January. 

Last month, CBP stopped about 51 percent fewer shipments on suspicion of violating the forced labor laws than it did in January. In January, CBP stopped 1,986 shipments with a value of $13 million, while in February it stopped 1,024 shipments with a total value of $9.7 million. Last year, apparel, footwear and textiles accounted for 13 percent of the overall number of shipments stopped by CBP on suspicion related to the Uyghur Forced Labor Prevention Act (UFLPA). 

Counterfeits, too, have become an area of focus for CBP—and, amidst shrinking seizure value in other categories, the illegally duplicated items proved a bright spot for the agency last month. In February, the agency seized 1,815 shipments containing over $525 million worth of counterfeits. That far exceeds the value of counterfeits seized by the agency in January; in that month, it seized 1,977 shipments with a total counterfeit value of over $291 million, which means, between January and February, the value of stopped counterfeit goods increased by 55 percent. 

One of CBP’s most pressing tasks at the moment is integrating a system that can handle the tariffs and fees that would be brought in should the Trump administration make good on its threat to axe the de minimis provision. To date, it has used its Section 321 Data Pilot, with partners like Amazon, FedEx and Shein, to verify how preemptive information about low-value shipments can help the agency clear them before they reach U.S. entry points. 

But CBP has yet to announce whether it will re-up that pilot, fully implement a program based on the results from the pilot or set other measures for processing an influx of shipments in place. In the meantime, goods coming from China that are ineligible for de minimis entry have been subject to tariffs decreed by Trump. 

That reality hasn’t been sitting well for many brands and retailers; data from BlueCherry shows that economic and political fluctuations are a serious concern for four in 10 executives working in fashion and apparel. Paul Magel, president, business applications and technology outsourcing at BlueCherry’s owner, CGS, said he believes much of the worry plaguing those brands and retailers comes from the question over which sourcing destinations could be slapped with tariffs next. 

As that uncertainty continues to loom, it has started to affect retailers’ future plans. Per CBP, the proportion of goods entering the United States via ship stayed around 35 percent in February, up less than one percentage point from January. And data from the National Retail Federation (NRF) shows that inbound cargo remains high as brands and retailers play the waiting game on yet more tariffs. January’s imports were up 13.4 percent year on year, according to the NRF’s Global Port Tracker, which it runs in tandem with Hackett & Associates. 

Jonathan Gold, vice president for supply chain and customs policy at NRF, said the trade group doesn’t see that trend stopping.

“Retailers are continuing to bring as much merchandise into the country ahead of rising tariffs as possible,” Gold said in a statement earlier this week.