Bipartisan Letter Asks Administration to End de Minimis for E-Commerce

With no legislative action on a proposal to end China's eligibility for de minimis shipments, one of its authors, Sen. Sherrod Brown, is asking the Biden administration to end de minimis treatment for all e-commerce purchases, or, at least, stop de minimis treatment for goods subject to partner government agency review, products that are trade priorities, and goods subject to Section 301 and Section 232 tariffs.

CBP's trade priority issues include intellectual property rights and apparel. The agency does detain suspected counterfeit goods in the de minimis package environment.

Brown, an Ohio Democrat whose re-election is considered one of the toughest races in 2024, was joined on the weekend letter by Sen. Rick Scott, R-Fla. Brown's bill (see 2306150061), is co-sponsored by Florida's other Republican senator.

The letter said: "The situation has reached a tipping point where vast sections of American manufacturing and retail are at stake if de minimis is not immediately addressed -- including a large portion of U.S. textile production and employment, as well as the broader Western Hemisphere textile and apparel co-production chain."

They wrote: "Existing law provides the executive authorities necessary to end duty-free treatment for de minimis shipments, under Section 498 and Section 321 of the Tariff Act of 1930. Chinese goods made with forced labor appear to be the heaviest users of de minimis, undermining enforcement of the Uyghur Forced Labor Prevention Act (UFLPA). De minimis shipments, now numbering 3 million a day, are at an elevated risk of violating UFLPA, containing counterfeit goods, exacerbating the fentanyl crisis, or posing a serious health danger to consumers. They also legally escape the Section 301 penalty tariffs on Chinese imports and regular import duties designed to safeguard import-sensitive sectors."

The language in the law that the textile industry has focused on is this: "The Secretary of the Treasury is authorized by regulations to prescribe exceptions to" de minimis thresholds when the Secretary finds that the exception "is necessary for any reason to protect the revenue or to prevent unlawful importations."

The letter notes that fentanyl and its precursor chemicals arrive in small packages, and that more than 70,000 people died from fentanyl overdoses in the most recent year where figures are available.

"The surge in de minimis shipments from China to the United States drives problems for U.S. businesses across industries from big box stores and retailers to U.S. manufacturers. As a direct result, 2023 saw an 80 percent surge in U.S. retail store closures compared to the year before," they wrote.

They asked the administration to require that all imports be subject to importer of record and entry summary requirements equivalent to those for other informal entries.

They said the administration needs to have accurate shipment reporting "to ensure de minimis is not being used by commercial operators to avoid paying duties."

They argued these changes could be made by executive order or rulemaking.