Coalition Presses for Restricted de Minimis; Trade Interests Push Back

Both co-sponsors of a bill to restrict Chinese goods from de minimis eligibility said that House Ways and Means Committee Chairman Rep. Jason Smith, R-Mo., who has the power to advance the bill, is interested in marking up the bill.

The Import Security and Fairness Act, introduced last year, would exclude both shipments from China and shipments from other countries if the goods in the small packages were of Chinese origin. The latter would be harder to detect.

Rep. Neal Dunn, R-Fla., told International Trade Today during a press conference announcing the "Coalition to Close the De Minimis Loophole," that he spoke recently with Smith at length. Rep. Earl Blumenauer, D-Ore., the top Democrat on the trade subcommittee and the leading voice in Congress on restricting de minimis, said that getting more sponsors signed on to the bill would "make it easier" for Smith to bring it up in committee.

He said that hundreds of members have never heard about the issue of small packages entering without paying duties, and when he gets an opportunity to talk to them about it, "people are stunned when they find out the facts."

He predicted that within a month or two, the majority of the House will be co-sponsors of the bill. He called it "more compelling by the day."

Rep. Dan Bishop, D-N.C., (see 2310200042) is one of the newcomers to the cause, and he also participated in the press conference.

Blumenauer added: "I think we have an excellent chance of moving this to a work session in the House Ways and Means Committee and coordinating with our friends on the Senate side. I mean the momentum is remarkable -- and it's just getting started."

Blumenauer and the groups that participated in the press conference March 6 also have pushed the White House to act on its own to restrict de minimis (see 2311290059), as has Sen. Sherrod Brown, D-Ohio, one of the co-sponsors of the Senate companion bill (see 2402260076).

Lori Wallach, director of Rethink Trade, said at the press conference that the administration has "plenty of discretion" to change eligibility for de minimis with how the statute's written.

Dunn said, "I would rather think the administration would be in favor of doing this," and said he was "a little puzzled why they haven’t done this already."

Blumenauer and his allies argue that the current de minimis regime is dangerous. Dunn said they "largely escape inspection." Because of the lack of oversight, they say, hazardous products such as exploding e-bicycle batteries are imported; fentanyl and its chemical precursors are shipped to drug dealers and addicts; apparel made with Uyghur forced labor is imported.

National Council of Textile Organizations CEO Kimberly Glas opened the press conference by saying that 10 textile plants have closed down in the last five months due to apparel coming in through what she called the de minimis loophole.

CBP says it does inspect de minimis shipments, and it does detain goods made with Uyghur forced labor in that environment, but that it needs more complete, accurate advance data to enforce customs laws (see 2309110059, 2401120070 and 2312140046). It is not behind Blumenauer's bill.

The National Foreign Trade Council, the U.S. Chamber of Commerce, the Consumer Technology Association, the National Association of Manufacturers and express shipping companies sent a letter March 6 to the White House trying to head off executive action.

"The average value of a de minimis package is roughly $50. If de minimis were to be eliminated or significantly degraded, that average $50 package could double in price, without enhancing law enforcement at our borders, after seeing a processing fee of $31.67 and a brokerage fee of $20 upon entering the United States," they wrote.

They said restricting de minimis would be a tax hike on both low-income consumers and small businesses.

Wallach blasted that argument as cynical, saying a consumer importing a $750 bicycle from China is far more damaging to a local bike shop than a change in policy. She said that the law was designed to bring purchases home after travel and admit gifts, and that its current use is crushing brick and mortar stores.

The Coalition for a Prosperous America, which argues that no e-commerce should be allowed to qualify for de minimis, also participated in the coalition press conference. CEO Michael Stumo called the economic argument "disgusting," given the numbers of Americans dying from fentanyl overdoses.

"The biggest drug mules in our country now are FedEx and UPS," he said. "They make Pablo Escobar look like a piker. And they’re making money off every package."

The business interests addressed that argument in that letter, saying that 99% of fentanyl is smuggled in passenger vehicles and truck shipments or by pedestrians crossing from Mexico.

Jim Carroll, a former Trump-era White House director of the Office of National Drug Control Policy, said during the press conference that the 99% statistic is not relevant because there's no ability to check what's coming in through de minimis shipments, so the opiates aren't seized in that environment. "This is a known unknown," he said.

Dunn said: "I do not see an effective opposition, frankly."

Effective or not, those with an interest in the status quo are pushing back. Express Association of America CEO Mike Mullen, speaking during public comments at the Commercial Customs Operations Advisory Committee meeting on March 6, said: "I don't need to tell you all how high the level of interest is in this subject, both on the Hill and in the White House. And much of that discussion is unfortunately not well-informed on the facts. As CBP knows very well from the statistics you publish, de minimis shipments are just 1.4% of U.S. imports by value. And despite that there are people who believe that by reducing the number of de minimis shipments, you can solve a whole long list of problems, like restoring the competitiveness of the U.S. textile industry and reducing the number of fentanyl overdoses, and those kinds of expectations probably aren't realistic."

The letter that the EAA joined also argued that restricting "de minimis would not 'shrink the haystack' of illicit shipments. It would simply 'squeeze the balloon', moving one billion de minimis packages to more cumbersome entry processes or the postal environment which includes less data than other means of de minimis entry."

They said any shipments that no longer entered under de minimis "would require tens of thousands of CBP personnel to process information that is not related to enforcement and collect duty, rather than spending that time on activities that would actually interdict illicit items."