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It's been more than three weeks since the federal government shutdown began, making this the second-longest shutdown in U.S. history. Most customs officials at ports are considered essential workers and remain on the job, even though they aren't being paid. But the shutdown comes while the Trump administration's tariffs are creating uncertainty for companies that are dependent on global trade.
The combined effects are creating problems for companies that rely on the Port of Houston.
The Port of Houston handles more exports by total value than any other port in the country. The imports it handles, like industrial equipment and electrical machinery, drive Texas-based manufacturing.
All that trade supports a lot of jobs, more than 1.5 million across Texas and well over 3 million nationwide from all the states that ship through the port. But it also depends on a clear understanding of things like wait times at ports to process goods coming into the country.
"And if the delay is a matter of hours, that’s one thing. If the delay becomes days, then that gets to be more difficult," said former Harris County Judge Ed Emmett, now a fellow in transportation policy at Rice University's Baker Institute.
U.S. Customs and Border Protection officials, who are considered customs officials, are still coming into work.
"Like the air traffic controllers, though, they won’t be getting paid," Emmett said, "So, at some point, that could get to be an issue."
If those customs officials start calling in "sick," as some federal airport workers have, it will mean longer delays for processing imported goods. And that costs money.
Houston Public Media reached out to the National Treasury Employees Union Chapter 163, which represents customs workers at the Port of Houston, but the chapter declined to comment.
Emmett says even before the shutdown, though, wait times at the Port of Houston were growing longer.
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"It was because of the constantly changing tariffs and the confusion over what products need to be treated how by the customs officials in this country," Emmett said.
Business executives don't have a uniform view on tariffs. What many have a problem with is the approach that President Donald Trump is taking – applying them one day, suspending them the next, then threatening to apply them again.
"Businesses look for predictable shipping schedules and any sort of uncertainty around added costs or planning challenges can make businesses more difficult," said Justin Theal, a senior officer with the Pew Charitable Trust's Fiscal 50 project. "When businesses don’t have certainty, a clear sense of what the future economic conditions are going to be, that can really cause businesses to delay or cancel investments."
Some regional companies are already seeing the effects of that uncertainty, not to mention the higher prices that come with the tariffs themselves. Chad Burke is president and CEO of the Economic Alliance Houston Port Region.
"A specific example would be a gasket company that’s a member of ours that is looking to do some expansion," Burke said. "Well, their input costs of raw materials doubled in a very short time, and immediately they began to kind of look for alternative sources and even temporarily put on hold an expansion project that they had to kind of add capacity for themselves."
Texas is especially vulnerable to the whipsaw effect of tariffs and the government shutdown. While imports make up 11% of the U.S. economy as a whole, they make up 15% of the Texas economy.
"Texas is more trade-exposed than the national trend," Theal said, "and that matters, because many of the industries that the state relies on for revenue, like energy and manufacturing and chemicals, they all rely on imported materials and equipment."
But imports are only half of the equation. Houston is also a leading departure point for exports. If the U.S slaps tariffs on other countries' trade goods, those countries can retaliate with tariffs against U.S. exports.
"Depending on where those are going and what those tariffs are, companies in other countries begin to do the same thing that we see from our own companies here that are importing goods from China," Burke said.
Or they can stop buying American goods altogether. Case in point, China has stopped buying liquefied natural gas exports from the U.S. in response to the tariffs. That's bad news for Texas, which is the country's second-largest exporter of LNG after Louisiana.
Margaret Kidd, president of the Houston Maritime Center and Museum, says the combined hits to exports and imports will wind up affecting real people.
"As we see container traffic decline, that’s going to impact dock workers and truck drivers and warehouse workers. So, you know, anyone that touches freight is going to be hurt, and at some point, you know, you’ll see lost jobs," Kidd said. "It may take six months. It may take longer, but at the end of the day, consumers will have less options on their everyday products ... and we’ll see higher prices."
There is the potential for relief on the horizon. A group of U.S. small businesses is suing to challenge the legality of Trump's tariffs. The U.S. Supreme Court will begin hearing arguments in the case in November. If the high court rules in the plaintiffs' favor, many such companies could be in line for reimbursement. But given how close to the margins some companies operate, such relief could come too late to be of help.
All this is coming at a rough moment for one of the major sectors that ships through the Port of Houston. Over 15 years, the U.S. petrochemical industry saw a surge of $200 billion in new manufacturing, more than half of it focused on the Greater Houston area.
"In the last 12 months, that new capital investment for new production has dried up completely" Burke said. "That preceded the tariffs, and it’s being driven by overproduction by Chinese manufacturers and subsidies by China to its manufacturing base to really kind of eat into global market and shorten those margins so that it becomes competitively difficult for the U.S."
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