Q&A: Ben Bidwell, director of North American customs and compliance, C.H. Robinson

Logistics Management Group News Editor Jeff Berman recently spoke with Ben Bidwell, director of North American customs and compliance, for Minneapolis, Minn.-based global logistics services provider and freight forwarder C.H. Robinson (CHR), about the trade landscape as it relates to tariffs on various fronts, including: the United State Trade Representative (USTR) recently updating its tariff policy and reinstating 352 previously expired tariff exclusions in May, opening more than $1 billion in refund potential for importers through the end of this year; the overall effectiveness of the Section 301 tariffs, and what CHR is doing to help shippers navigate through tariff-related issues and challenges, among others. Their conversation follows below.

LM: USTR reinstatement of tariff policy and reinstatement of the tariff exclusions. What does it really mean for shippers. One of your customers potentially has the ability to get back nearly $20 million through these efforts.

Bidwell: The USTR opened comments last year after all the exclusions had since expired and gone away. And the USTR opened up comments, saying it is entertaining the reinstatement of certain exclusions. We want to publicly hear from people both for and against the tariffs and the exclusions. The public comment closed and it was [crickets] for quite a while. And then out of the blue, the USTR announced it was going to reinstate 352 [tariff] exclusions. In doing so, it was going to make those exclusions valid through the end of 2022 and also make them retroactive back to October 21, 2021.

LM: What does that mean for shippers?

Bidwell: What that means for shippers is if you were importing products that qualify for these specific exclusions that you don’t have to pay the Section 301 tariffs going forward through the end of 2022, and, equally important, everything you have already imported dating back to October 2021, you can apply for a refund with U.S. Customs

That was really the significant part, in that it did not seem the shipping community was talking about that enough. It did not seem that importers were as aware as they should have been. For one our customers that has nearly $20 million in potential refunds coming its way, that was just the retroactive piece. There was a list of our customers that had upwards of $1 million-to-$3 million that they were looking to get back.

LM: How did you help them on this front?

Bidwell: One of the things we did was put a U.S. tariff search tool on the CHR web site. What it did was allowed shippers, importers, and customers to go on the site, enter in a tariff number or multiple tariff numbers—and in the search results it will tell you if that tariff is subject to an exclusion and it will go so far as to tell you what that specific tariff exclusion language is so that they can very easily identify if it is a realistic expectation as to if they will get the tariff refund money back or not and if they want to go through that process to get that money refunded.

LM: How do you view the timeline for this situation, as shippers start to learn more about the possibility of getting tariff refunds [duty recovery] should they qualify? Do you think we will start to see more significant momentum behind these efforts?

Bidwell: We have been very proactive in our outreach with our customer base, as well as through our C.H. Robinson trade and tariff site. As far as advocating for shippers, we are telling them they need to take advantage of these exclusions in place, and we are really trying to get the word out there. From our standpoint, I would say a very significant number—most, if not all—of our customers have gone through a very significant review process. But one of the interesting things is when we are out talking to new or prospective customers, it is fairly often that they maybe did not realize what potential was really out there.

LM: Shifting gears, there has been a fair amount of talk about what actions the White House may take as it relates to lifting some of the existing tariffs between the U.S. and China. In some ways, do you think it looks and feels like a “wait and see” type of situation?

Bidwell: I would certainly echo the wait and see situation we are in today. The Administration is currently conducting the four-year statutory review for the Section 301 tariffs as a whole. This review is really meant to cover, really twofold, the effectiveness in achieving the objectives of the Section 301 tariffs, and secondly, looking at what the effects of the Section 301 tariffs are on the U.S. economy, including consumers. That is what the Administration is doing right now in reviewing those tariffs as a whole.

LM: What can come out of that, in terms of what the end result may be?

Bidwell: To me, there are three major things. One is that the Administration says that the tariffs need to go away. The second option is to keep the tariffs in place as they are doing their job and leave it as is. And the third, and more likely, option is that the Administration says it is going to keep the tariffs but is going to either reintroduce past exclusions or introduce a new tariff exclusion process.  

LM: How is it determined which commodities and also types of importers are eligible for these exclusion processes?

Bidwell: It is normally done through public comment by explaining that here is the exclusion process and if you feel that your product or your commodity should be subject to an exclusion, here is the criteria that is needed to submit to us to explain why. It is really a laundry list of data that the USTR wants when it is making those determinations. One thing to note is that if an exclusion is granted either for a specific product or a specific tariff, that is not applicable for just one importer or just one shipper. That is applicable for the trade as a whole. If one person is successful in getting that exclusion, the trade as a whole can utilize that exclusion.

LM: How do you view the collective impact of tariffs on U.S. businesses and supply chains going back to March 2017, when they initially took effect? For example, the National Retail Federation has long maintained that tariffs are really as an extra cost, or tax, on businesses.

Bidwell: Something that we have seen as a byproduct that has had an impact and is somewhat unforeseen is that Customs now has a seat at the table. What I really mean by that when we are out talking with customers, historically, pre-Section 301 tariffs, Customs was oftentimes an afterthought, especially for small- and medium-sized shippers.

LM: In what ways?

Bidwell: Say through a quarterly business review or a prospective meeting that was freight-focused, with talks about air and ocean and if there is time at the end, we will talk about Customs for ten minutes. We have seen a pretty dramatic shift, where customers are now saying “let’s sit and designate the entire afternoon to talk about the trade landscape and where things are going and how it impacts us, and how it could potentially impact us.” Those conversations are now taking place much earlier in the process. So, instead of looking at everything post-importation, shippers are really engaging with Customs brokers and trade experts much earlier in the process, telling them they are thinking about importing a certain product or looking at importing this product and wanting to know what that would look like and what they need to be watching out for, or what the tariff impact is. That is one of the big impacts we have seen.

LM: What are some of the other impacts?

Bidwell: Another one is based on the statistics CBP provides. If you look at fiscal year 2017 and looked at what CBP collected in duties, it was roughly $35 billion. For fiscal year 2021, it was $85 billion. You are seeing very substantial jumps. They number is constantly increasing and increasing significantly, more than doubling in that four-to-five-year period.

LM: There has, for a while, been a fair amount of talk about China-based manufacturers vetting the possibility of moving operations to somewhere else like China or Malaysia, in order to get around the tariffs. Does that have any true potential or is it unrealistic as it costs a lot to set up new manufacturing facilities and operations and distribution policies somewhere else.

Bidwell: This was definitely a hotter topic at the onset of the tariffs, and it has certainly died down since then. That is not to say that those conversations still do not take place, but, as far as action that comes out of those, I think it is still far and few between. To that point, though, we have seen certain shippers that have shifted production from one area to another if they can. It is a huge undertaking and a massive investment to pick up and move manufacturing from one location to another.

LM: Given the major increases in duties collected from tariffs you previously noted, have the initial objectives of putting Section 301 tariffs been met, do you think?

Bidwell: I think it is very difficult to assess today, and we are going to learn a lot from the review the Administration is currently doing to see if were the metrics they were hoping to accomplish were indeed accomplished. We are just not sure today, at this point.  The purpose of the review is to gauge the effectiveness of the tariffs and impact four years after that took effect. That four-year timeline is effectively here. We have not heard when that review will be completed.