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WASHINGTON – U.S. Representative Earl Blumenauer (D-Ore.), chairman of the House Ways and Means Trade Subcommittee, has unveiled new legislation to stop non-market economies and goods from exploiting the de minimis threshold that allows imports valued under $800 to come into the U.S. without paying duties, taxes or fees.
“The number of packages we receive in the United States has skyrocketed to more than 2 million daily packages, a number that will only climb in the coming years,” said Blumenauer. “As long as foreign companies that sell their goods in America are splitting up their shipments to evade tariffs and oversight, American businesses will continue to be put at a competitive disadvantage cost-wise. This loophole also makes it easier for people to import illegal goods and harmful products, because there is virtually no way to tell whether these packages contain products made through forced labor, intellectual property theft, or are otherwise dangerous.”
Specifically, Blumenauer says the legislation would:
- Prohibit goods from countries that are both non-market economies and on the U.S. Trade Representative’s watch list from using de minimis: To address concerns related to U.S. competitiveness, the legislation prohibits goods from non-market economies, such as China, from benefiting from de minimis treatment.
- Prohibit goods subject to enforcement actions from using de minimis: U.S. enforcement statutes, such as Section 301 and 232, provide the U.S. with leverage to address unfair trade practices that harm U.S. workers and firms. Blumenauer says exempting de minimis shipments from paying enforcement-related duties has significantly undercut this leverage, even though de minimis shipments subject to other enforcement actions, like antidumping and countervailing duty orders, are still required to pay the duties.
- Close de minimis loophole for offshore distribution or processing facilities.
- Require Customs and Border Protection to collect more information on all de minimis shipments and prohibits use by bad actors: To address concerns regarding compliance with U.S. laws, this provision makes common-sense changes that will require CBP to collect more information on de minimis shipments and prohibit importers that have been suspended or debarred from being able to use de minimis. This provision provides statutory support for the ongoing work that multiple administrations at CBP have already started.
The legislation has received support from the National Council of Textile Organizations (NCTO) and the Alliance for American Manufacturing.
“We are very supportive of Chairman Blumenauer’s bill, which would effectively prohibit China and all nonmarket economies from exploiting the Section 321 de minimis mechanism in U.S. trade law, a damaging loophole that has severely undermined U.S. companies and workers and our Western Hemisphere trade partners, while also endangering American consumers,” said NCTO president and CEO Kim Glas. “We applaud the chairman’s leadership on this critical issue and look forward to working with the House Ways and Means Trade Subcommittee to move this legislation forward.”
“We support introduction of this legislation to reform the de minimis threshold, which is routinely exploited to evade U.S. enforcement actions against China and other trade cheats,” said Alliance for American Manufacturing president Scott Paul. “The bill takes aim at the worst offenders, while also addressing loopholes used by bad actors to avoid paying taxes, duties and fees. We strongly encourage Congress to adopt these reforms while also ensuring that additional steps are taken to monitor transshipments and increases in de minimis volume from other countries.”
The legislation’s full text can be found here.
