Southern Shrimp Alliance Opposes Proposals to Grant Importers Deferrals of Duty Payment Obligations

The Southern Shrimp Alliance notified U.S. Customs and Border Protection (CBP) of the U.S. shrimp industry’s objection to requests from importers for the deferral of payment of estimated antidumping and countervailing duties for a significant time period.

Last week, CBP issued a notice to importers informing them that “due to the severity of Novel Coronavirus (COVID-19), [CBP] will approve on a case by case basis additional days for payment of estimated duties, taxes, and fees due to this emergency.” Unsatisfied with this individualized approach, importers have pressed for a broad deferral program that would grant companies the ability to defer payment of all estimated duties on imported goods for at least ninety days.

In a letter sent today to the CBP’s Acting Commissioner, Mark A. Morgan, the Southern Shrimp Alliance joined other trade-affected domestic industry organizations in expressing its strong opposition to these proposals.

The Southern Shrimp Alliance explained that in order to obtain trade relief, thousands of small- and medium-sized family-owned enterprises demonstrated that they were suffering material injury by reason of unfairly traded imports and that these businesses have twice established, most recently in 2017, that in the absence of antidumping duties, the harm caused by these unfairly traded imports would recur. As with all other Americans, the shrimp industry faces unprecedented challenges in the face of the public health measures taken in response to the pandemic of COVID-19. These challenges make the U.S. shrimp industry even more susceptible to the adverse effects of unfairly traded imports.

The Southern Shrimp Alliance additionally observed that supporters of broad deferral programs for importers have failed to mention that a substantial portion of goods entered into the United States subject to antidumping and countervailing duties are imported by foreign parties (non-resident importers of record) and shell/paper companies. Providing such entities with lengthy payment deferrals means that massive amounts of antidumping and countervailing duties owed will never be paid to the U.S. Treasury. Under our existing system, non-payment of antidumping and countervailing duties is a severe problem, with CBP recently reporting to Congress that the principal owed on open bills for antidumping and countervailing duties increased from $2.8 billion in fiscal year 2017 to $3.5 billion in fiscal year 2019. The adoption of a broad payment deferral program would explode these numbers.

The Southern Shrimp Alliance also noted that the biggest beneficiaries of any broad duty payment deferral program would be Chinese companies that have been excluded from the U.S. market through the implementation of high antidumping duty cash deposit rates, such as the 112.81 percent cash deposit rate applicable to the vast majority of Chinese shrimp producers. A duty deferral program would invite these goods into the U.S. market just as Chinese manufacturers and China’s export infrastructure roar back into operation while U.S. companies are forced to grapple with the virus that had shut China down.

Yesterday, CBP sent out another notice to importers indicating that the federal agency would no longer accept requests for payment deferrals. While this is a positive development, in that same notice, CBP explained that the agency retained the right to allow deferrals should it choose to accept requests in the future. Separately, importing groups have continued to advocate for a broad-based deferral program that would not be subject to the discretionary judgment of CBP.

“Last year, putting all duties, taxes, and fees deposited on imports together, importers in the United States paid an overall duty of less than three percent on $2.7 trillion worth of imported goods. Now, confronted with a national emergency the likes of which none of us have seen in our lifetimes, the effort by importers to get out of paying even this meager amount into the U.S. Treasury is downright disgusting,” said John Williams, the Executive Director of the Southern Shrimp Alliance. “And for what? So we can bring in more imports from China? While we tackle COVID-19? This Administration must reject requests for deferrals of payment of estimated antidumping and countervailing duties.”

Read the Southern Shrimp Alliance’s March 27, 2020 letter to Acting Commissioner Mark A. Morgan here:
Read the March 24, 2020 letter from the American Iron and Steel Institute, the Steel Manufacturers Association, the Committee on Pipe and Tube Imports, the Specialty Steel Industry of North America, and the American Institute of Steel Construction to Acting Commissioner Mark A. Morgan here:
Read the Coalition for a Prosperous America’s March 23, 2020 letter to Acting Commissioner Mark A. Morgan here:
Read the Committee to Support U.S. Trade Laws’ (CSUSTL) March 23, 2020 letter to Acting Commissioner Mark A. Morgan here:

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