Economic Impact Designation for Proposal to End de Minimis for Section 301 Goods Drawing Concern

There is some industry concern that a proposal to end the de minimis exemption to Section 301 goods isn't considered “economically significant,” an executive following the issue said. CBP submitted to the Office of Management and Budget a proposed rule titled “Excepting Merchandise Subject to Section 301 Duties from the Customs De Minimis Exemption,” according to OMB’s Office of Information and Regulatory Affairs website (see 2009040026).

The proposal remains under review as of Oct. 19 and is listed as not economically significant. The proposal should be considered economically significant “as the impact of this rule will greatly exceed the threshold of $100 million annually for this designation,” the executive said. “Being designated economically significant is important, as it will ensure the trade community has ample opportunity to consider and comment on the rule, and it also will ensure the Government conducts a full cost/benefit analysis of the impact of the rule,” he said. OIRA can designate the rule as economically significant and “various trade entities have provided them reliable data that shows the impact of implementing the rule is well above $100 million annually,” he said.

The action seems to go against previous Trump administration efforts and the intent of Congress, he said. “The administration has been a strong advocate of assessing the costs of new regulations and ensuring the benefits justify those costs, and this rule should be no exception,” the executive said. “Further, Congress has taken the position as recently as 2016 that the U.S. de minimis level should be $800, and they made no exceptions for certain kinds of tariffs. Substantially changing the rules for applying statutory de minimis procedures should remain a congressional prerogative.”