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U.S. government not prepared to collect tariffs on Mexican goods

President Trump intends to impose tariffs on imported Mexican goods starting Monday. But import industry insiders say U.S. Customs and Border Patrol (CBP) faces a multi-billion dollar bureaucratic disaster.

“Right now customs has no instructions from the White House,” said Nicole Bivens Collinson, the President of International Trade & Government Relations at Sandler, Travis & Rosenberg, P.A. The firm specializes in international trade as well as customs and export law. Collinson said the CBP doesn’t “know how they are going to implement” the tariffs Trump is threatening to impose on Mexican imports.

“Our position hasn’t changed," White House Press Secretary Sarah Sanders reiterated on Friday morning. “Tariffs are going to take effect on Monday.”

Trump has threatened to further increase the tariffs in July and October if Mexico fails to stop the flow of migrants from Central and South America who are trying to reach the United States.

Lobbyists and lawyers who take part in a weekly CBP briefing on trade issues say the agency is not prepared to comply with the order to collect the tariffs if Trump orders them next week.

“To do that, customs has to figure how to manage it and reprogram computers. You can’t do this by hand,” Collinson said. “Not when you have $75 million of trade crossing the border in both directions every hour.”

Supply chains make it complicated

Trade between the U.S. and Mexico exceeded $203 billion in the first four months of 2019, according to the U.S. Census Bureau, which tabulates U.S. international trade in goods and services.

The Pacific Coast Council of Customs Brokers and Freight Forwarders Association (PCC) sent a letter June 5 to U.S. Trade Representative Robert Lighthizer that warns the threatened tariffs will cost U.S. customs brokers and their clients millions of dollars and the lack of guidance makes the matter more dire.

Cargo truck drivers line up to cross to the United States at Otay commercial crossing port in Tijuana, Baja California state, on June 6, 2019, Mexico. (Photo by Guillermo Arias / AFP) (Photo credit should read GUILLERMO ARIAS/AFP/Getty Images)

“It is our responsibility as the most knowledgeable professionals, to express our grave concern, even alarm, that it will be impossible to comply as the mechanisms for compliance are not available between now and June 10, or even before the increase planned for July 1,” the letter said.

Yahoo Finance contacted the CBP for comment and the agency said it would issue a statement later today.

Collinson said Trump jumped into the Mexico tariff threat without understanding the real world ramifications.

“The White House has a tendency to put out stuff using terms that have very distinct and specific terms that have very distinct and specific meaning in the field and they don’t understand that using those words can have a huge impact,” she said. It’s a concern the PCC shares and is one of the reasons it’s asking the administration “to postpone any new import duties on products from Mexico, until CBP can develop the procedures by which importers and brokers can reasonably pay them.”

Adam Shapiro is co-anchor of Yahoo Finance On the Move.

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