Smith Says CBP Has Operational Concerns for Imposing Section 301 Tariffs on de Minimis Goods

CBP has some qualms with the operational aspects of ending the de minimis exemption for goods subject to Section 301 tariffs, Executive Assistant Commissioner for International Trade Brenda Smith said while speaking on the virtual Coalition of New England Companies for Trade conference on Nov. 9. There's a CBP proposal for the change that's under Office of Management and Budget review (see 2009040026). “We do have some concerns,” she said.

The Office of the U.S. Trade Representative's goal for the Section 301 tariffs was to send a message to China, Smith said. “What USTR has seen over time is that not collecting that remedy on small packages is really diluting that message,” she said. “They have had a number of conversations with us around the operational environment in which that sort of duty might be collected.” CBP's concerns involve the lack of “digitized” trade processes at the U.S. Postal Service, especially when compared with the express carriers, she said.

CBP will take a “risk-based” approach and “has already started to apply some analytics to try and identify where the biggest risk is,” Smith said. “We are not looking to go after nickels and dimes, we are looking to go after the egregious violators. And so if you think through CBP's traditional approach about prioritizing, working with trusted partners and assessing the risk, that's probably a pretty good path to where we'll end up.” Meanwhile, a representative for the Coalition for a Prosperous America, which doesn't like the de minimis exemption (see 1811200029), is scheduled to meet with OMB on Nov. 13 about the proposal.

Such a change would likely result in some disruption, but brokers will do what is asked of them regardless, said Amy Magnus, director of Customs Affairs and Compliance at A.N. Deringer, while speaking on a later panel at the virtual conference. It would mean a lot more work for brokers, though not an overwhelming amount, she said. Disruption management and data collection are part of the job, Magnus said.

Smith also said CBP is hoping to see some legislative change as part of the 21st Century Customs Framework. The framework is “meant to serve as a vision” of “what we as a community want trade to look like 10 years, 20 years from now,” she said. The agency knows that it will require “continued investment in technology, continued investments in our skill sets, and ideally legislative change.” The congressional action would be similar to the Customs Modernization Act, which was put in place more than 25 years ago, she said. “We think it might be time for a new Mod Act, and so are hoping that when the new Congress sits in January that we will have the opportunity to really engage.”