Bipartisan, Bicameral Bill Would End Chinese Eligibility for de Minimis
The top Democrat on the House Ways and Means Committee has reintroduced a bill eliminating Chinese shippers' eligibility for de minimis, keeping the ban on China, and adding a requirement that remaining de minimis shipments include at a minimum: a description; an HTS code; a country of origin, shipper, importer; and a U.S. value. The new version also dropped language around sections 232 and 301 tariffs in the previous version.
This time, Rep. Earl Bluemenauer, D-Ore., has won bipartisan and bicameral support, with Rep. Neal Dunn, R-Fla., as a co-sponsor, and a companion bill also introduced June 15 by Sens. Sherrod Brown, D-Ohio, and Marco Rubio, R-Fla.
“The de minimis loophole is a threat to American competitiveness, consumer safety, and basic human rights,” Blumenauer said in a news release announcing the reintroduction. “It is used by primarily Chinese companies to ship over two million packages a day into the United States. It puts American businesses at a competitive disadvantage while flooding American consumers with undoubtedly harmful products. There is virtually no way to tell whether packages that come in under the de minimis limit contain products made with forced labor, intellectual property theft, or are otherwise dangerous. It is time to close this loophole once and for all.”
The bill provides for a civil penalty of $5,000 for the first offense and $10,000 for subsequent offenses if the data submissions are false. According to CBP, about 25% of packages sent by companies participating in a data pilot had violations, often the wrong Harmonized Tariff Schedule code, or only providing a code for one of several items in a package (see 2304170052).
It would take effect 180 days after enactment.
Blumenauer said CBP already has begun work on data submissions for de minimis packages, and this provides statutory support for those efforts.
About 2 million packages a day enter the U.S. under the $800 de minimis threshold.
“China exploits our capital markets and uses slave labor to undercut American businesses,” Rubio said in the news release. “It is bad for our country to let China flood our country with duty-free packages using the de minimis exception. The Import Security and Fairness Act will close this loophole and take another critical step to stop China from cheating on trade.”
The bill has support from numerous unions and trade groups representing domestic manufacturers, as well as left-of-center trade skeptics such as ReThink Trade and Public Citizen.
National Council of Textile Organizations CEO Kim Glas said in the press release, “This gaping loophole allows more than 2 million shipments a day to enter the U.S. market duty-free and largely uninspected, which in turn severely undermines the competitiveness of U.S. textile manufacturers and workers, as well as our Western Hemisphere trade partners. It also endangers American consumers by allowing tainted products like those made with forced labor and counterfeits to land on our doorsteps."
Alliance for American Manufacturing President Scott Paul issued a statement on the introduction of the bills that said: "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. Moving forward, it is our hope that Congress takes steps to lower the current $800 threshold, which is excessive, wildly misaligned with many of our trading partners, and invites wrongdoing."