Manufacturers Say 10+2 Costs $20 Billion

Manufacturers Say 10+2 Costs $20 Billion

U.S. Customs and Border Protection's Importer Security Filing rule will impose an annual cost of more than $20 billion on the U.S. economy, according to a study by a manufacturers’ group.

The “10+2” rule will require manufacturers and other importers to provide expensive new data to the government, says a report by the Customs and Border Coalition, a group launched by the National Association of Manufacturers in December.

Based on a survey of companies accounting for nearly 60 percent of seaborne manufactured imports, the survey corroborates an earlier report issued by the NAM, said NAM President John Engler.

"The potential impact of this rule is huge," Engler said. "To put the cost in perspective, it is virtually the equivalent of doubling the import tariffs that manufacturers now pay to bring products and components into the United States."

The Customs and Border Coalition is charged with making sure that business concerns are addressed when government agencies are developing security rules and procedures that govern exports and imports. The CBC represents a broad base of companies and associations engaged in international trade and involved with global supply chains, ranging from manufacturers and retailers to customs brokers and freight forwarders.

Based on the results of the survey, the report concludes that companies of every size will feel a significant impact from implementing 10+2. The major findings:
-- Compliance will be difficult and disruptive to respondents' supply chains.
-- The new rule imposes permanent operational costs of $3.5 billion every year.
-- The new rule adds nearly three days of additional delays, on average, to the global supply chain, thus costing an additional $17 billion annually.

Overall, these costs amount to more than $20 billion a year.

Engler said that NAM has also provided the government with "practical and actionable recommendations for modifications that will reduce the cost of the new customs rule without diminishing national security one bit. Department of Homeland Security Secretary Napolitano has already shown she is sensitive to the need for U.S. economic security as well as national security, and we believe our recommendations will get careful consideration."

Contact Alan Field at afield@joc.com.