On Jan 18, 2022, Representative Earl Blumenauer (D-OR), chairman of the House Ways and Means Trade Subcommittee, announced new legislation, the Import Security and Fairness Act that would restrict the use of de minimis. De Minimis allows imports valued under $800.00 to enter U.S. commerce without paying duties, taxes, and fees.

Two million packages enter the U.S. using the de minimis threshold each day.

Rep. Blumenauer believes the new legislation would strengthen U.S. international trade import laws by stopping non-market economies and goods from exploiting the de minimis threshold.

Rep. Blumenauer said in a statement, "As long as foreign companies that sell their goods in America are splitting up their shipments to evade tariffs and oversight, American businesses will continue to be put at a competitive disadvantage cost-wise," "This loophole also makes it easier for people to import illegal goods and harmful products because there is virtually no way to tell whether these packages contain products made through forced labor, intellectual property theft, or are otherwise dangerous."

The Import Security and Fairness Act would:

Prohibit goods from non-market economy countries and on the U.S. Trade Representative's (USTR) priority Intellectual Property watch list from using de minimis. The only country that is both a non-market economy and on the USTR's priority Intellectual Property watch list is China.

Prohibit goods subject to enforcement actions such as Section 301 and 232 from using de minimis. Enforcement actions are utilized to address unfair trade practices that harm U.S. companies and workers. De minimis shipments are exempt from these enforcement actions, however, they are not exempt from antidumping and countervailing duties.

Require U.S. Customs (CBP) to collect additional information on de minimis shipments. CBP would collect additional data on de minimis shipments and prohibit importers that have been suspended or debarred from being able to use de minimis.

This bill has been met with opposition from the U.S. Chamber of Commerce, the Express Association of America, and the National Retail Federation, amongst others.

Altering the de minimis provision would drive up prices, ultimately passing onto the U.S. consumer and small to medium-sized businesses that utilize this provision to import parts for their manufacturing process.

On the other side of this debate, the provision is believed to make it easier for people to import illegal goods and potentially harmful products. CBP has indicated that the rise in low-value shipments heightens the risk of counterfeits destined to the black market. There is virtually no way to tell whether the shipments contain products made through forced labor, intellectual property theft, or are otherwise dangerous to U.S. commerce.

There is also the loss of duty. Over 80% of small package shipments that qualify for de minimis originate from China. These packages are exempt from general duty and fees as well as Section 301 and Section 232 trade remedy duties.

On Jan 25, 2022, the Import Security and Fairness Act was included in the House of Representatives "America Competes Act of 2022". If this Act passes as written, Chinese goods would no longer be eligible for de minimis.

NNR USA will continue to monitor the progress and keep our customers informed of the outcome.