October 1 Government Shutdown – US Customs and Border Protection Will Continue to Collect Tariffs and Process Cargo During the Federal Shutdown

The US Customs and Border Protection (CBP) has confirmed it will continue revenue collections throughout the federal shutdown that commenced on October 1, 2025, according to a Department of Homeland Security (DHS) contingency plan. The agency, which processes close to US$100m in daily duties, tariffs and fees, plays a critical role in keeping trade lanes open and government funds supplied even when Congress fails to reach a budget deal.

That said, supply chains are still feeling the pressure. Ports, rail carriers and logistics firms are bracing for ripple effects, with some bottlenecks expected due to a lack of staffing and documentation delays. The CBP has explained that cargo inspections, passenger processing and port-of-entry operations will go on, even during shutdown conditions. A procedural advisory also confirms that “passenger processing and cargo inspection at ports of entry will continue during a lapse in appropriations”.

As of mid-2024 CBP had about 66,000 employees, with roughly 61,000 retained to keep essential functions moving during a lapse.

Not all services can proceed without interruption, however. Documentation reviews, duty assessments, and compliance checks slow as non-essential staff are furloughed. Imports that require extra scrutiny – including pharmaceuticals, perishables, and other regulated goods – can face longer dwell times.

Bonded warehouses – facilities where imported goods can be stored without paying duties until released – are coming under fresh pressure because of the shift. With more than 1,700 bonded warehouses across the US, importers redirect shipments there to navigate Customs slowdowns. These facilities saw a surge in use after changes to trade rules and tariffs under US President Donald Trump’s last term. A prolonged funding gap now risks exceeding their capacity.

Logistics firms and shippers reroute freight through less congested ports or prioritize pre-clearance of goods to avoid inspection backlogs and protect sensitive cargo. Exporters could also take a hit. Those dealing in controlled goods, such as aerospace parts or defense technology, often wait for export licensing approvals from the US Department of Commerce’s Bureau of Industry and Security (BIS). During shutdowns, these approvals typically pause or slow, delaying outbound shipments and contracts.

Regulated imports are most exposed to process slowdowns. The US Department of Agriculture (USDA) Food Safety and Inspection Service continues mandated meat, poultry, and egg inspections, but some US Food and Drug Administration (FDA) activities narrow during a shutdown, which can delay certain FDA-regulated shipments.

Logistics disruptions always come with a financial cost. During the 35-day 2018-19 shutdown, the Congressional Budget Office estimated a loss of US$8bn from US gross domestic product in the first quarter. The hardest hit sectors were those sensitive to logistics delays – retail, automotive and manufacturing among them. In 2019, shipment dwell times at the Port of Los Angeles-Long Beach also rose by 15 to 20%.