CBO Says House de Minimis Bill Would Collect $23.5B in Tariffs, Cost CBP Little

The nonpartisan Congressional Budget Office has projected that applying Section 301 tariffs to the contents of packages that previously benefited from de minimis, as proposed in the House (see 2407080049), would increase revenue from tariffs by about $23.5 billion in the 2024-2034 period, but would only require reprogramming of ACE and more money for data storage and ACE maintenance, not new CBP officers. The CBO estimated that improving ACE would cost $3 million, and that CBP would need $2 million annually to maintain the system.

This analysis differs greatly from defenders of de minimis, who say there would need to be tens of thousands of additional agents, import specialists, inspectors and lawyers at CBP to implement this law (see 2407250035).

Because importers also would owe merchandise processing fees on more packages, CBO says the deficit reduction would be more than just the duties minus the increased outlays; however, CBO must assume that sunsets are real, so that estimate assumes MPFs expire in 2031.

The analysts said they arrived at the estimates by projecting "the volume of imports entering the country and the value of those goods, as well as CBO’s expectation of how firms and importers will respond to the bill’s changes to the de minimis exception." CBP told them that $27 billion worth of goods that would have been subject to Section 301 and other special tariffs entered in 2023.

However, they wrote that there is "significant uncertainty" in making a projection of how much merchandise would enter U.S. commerce in the small package environment if the law changed in this way.

The analysts also released an estimate of the cost of Stop China’s Exploitation of Congolese Children and Adult Forced Labor Through Cobalt Mining Act, another bill that passed out of the House Ways and Means Committee in April. They said, after talking to DHS officials, they believe the Forced Labor Enforcement Task Force would need to add 10 employees in order to write a report on forced labor in cobalt mining in the Congo. With salaries and benefits, and raises over the years, CBO estimates it would cost $12 million during the 2024-2029 period to implement that law.