Promotional Products Industry Weathers U.S. Government Shutdown

The federal government went back to work last week after a 16-day shutdown. While the incident brought disorder and uncertainty to the country, most industry businesses PPAI spoke to withstood it well.

“I can’t really point to any major issues yet,” said Larry Whitney, compliance manager at Polyconcept North America, in an interview with PPB last week. “Goods are still arriving. Because we participate in some customs programs like C-TPAT [Customs-Trade Partnership Against Terrorism] and FTZ [Foreign Trade Zone] we are considered a low-risk importer by U.S. Customs and typically don’t encounter delays.”

The issues that did arise during the shutdown reflected a lag in the pace of government operations but didn’t prevent industry companies from doing business. Randy Chen, president of Impex International, told PPB: “We are seeing a delay to get our inbound containers released from the U.S. Customs and Border Patrol. We have many orders that are waiting for these shipments.”

Federal government dysfunction is having its own effect on industry business, however, regardless of the shutdown and its resolution. “We have experienced a slowdown,” says Peter Hirsch, MAS, owner of supplier Hirsch Gift, Inc. “It’s maybe 20-percent off for this time of the year, starting from the beginning of October. I am putting it down to nervousness in the market with the debt default deadline more than the government shutdown. We are also experiencing more than average rush orders, reflecting last-minute decisions sometimes involving large dollar amounts.”

Whitney adds: “Like everyone, we are frustrated by Congress’s inability to do their job, and the uncertainty that is a result. In addition to the budget, which is getting all of the current press, we are concerned over their inability to act on bills related to GSP [General System of Preferences] and the MTB [Miscellaneous Tariff Bills] this year. Allowing both to expire has had an impact on the duty rates that many in our industry pay on certain products, raising costs to us and our customers.”

The bill that passed last week, rather than resolve the government budget and debt ceiling disputes, moved the deadlines into early 2014. The government is funded until January 15, 2014. A budget deal must be reached and agreed upon by that date, or if no such deal is present, then the government must pass yet another continuing resolution or face shutdown. And on February 7, 2014, the debt ceiling limit will once again be reached.

In a guest post on Connections, the personal blog of PPAI President and CEO Paul Bellantone, CAE, PPAI Government Relations Manager Seth Barnett writes on the shutdown’s resolution and what can be expected in the months ahead.

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