U.S. Representative Earl Blumenauer (D-OR), chairman of the House Ways and Means Trade Subcommittee, today unveiled new legislation to strengthen U.S. international trade import laws to stop non-market economies and goods from exploiting the de minimis threshold that allows imports valued under $800 to come into the United States without paying duties, taxes, or fees.
“The number of packages we receive in the United States has skyrocketed to more than two million daily packages — a number that will only climb in the coming years. 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,” Blumenauer said. “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, the legislation would:
- Prohibit Goods from Countries that are Both Non-Market Economies and on the U.S. Trade Representative’s (USTR) 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. The U.S. government has found that such countries provide unfair benefits to their companies. This change ensures that shipments from these countries don’t benefit further under U.S. law.
- Prohibit Goods Subject to Enforcement Actions from Using De Minimis: U.S. enforcement statutes, such as Section 301 and 232, provide the United States with leverage to address unfair trade practices that harm U.S. workers and firms. 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 CBP 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 AFL-CIO strongly supports Chairman Blumenauer’s Import Security and Fairness Act that would close the gaping loophole now harming American companies,” said AFL-CIO President Liz Shuler. “The wild imbalance between the U.S. de minimis threshold of $800 and the Chinese threshold of $7 must be fixed in order to level the playing field. We urge swift passage of this important legislation to stop this exploitation.”
“It’s long overdue that Congress address the rampant abuse of the de minimis loophole by China and companies like Amazon,” said Coalition for a Prosperous America CEO Michael Stumo. “Originally meant for low-value goods, multinational corporations addicted to profiting off of cheap Chinese imports successfully lobbied to increase the de minimis limit to $800 in 2016. As a result, multinational importers of subquality — and often harmful — Chinese goods have exploited de minimis to create a direct from the Chinese manufacturer to U.S. consumer business model that has seen an explosion of more than 2 million packages per day. By prohibiting goods from non-market economies like China from using de minimis, Congressman Blumenauer’s legislation is exactly the kind of solution needed to reverse decades of harm to American workers and businesses from flawed U.S. trade law.”
“We support the 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 current de minimis rules create an unfair playing field that penalizes U.S. bicycle companies, retailers, and customers for having domestic, job-creating warehouses and stores. The Import Security and Fairness Act will help close an important loophole that enables counterfeit or uncertified products to reach Americans. We’re grateful for Congressman Blumenauer’s leadership on this pro-bike trade policy that would improve competition and safety,” said PeopleForBikes Policy Counsel Alex Logemann.
“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. 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,” said the National Council of Textile Organizations President and CEO Kim Glas.
