De minimis, a customs rule that allows for duty free shipment and minimal inspection if the overseas vendor claims the value is under $800, is a haven for contraband, whether it’s fake Nikes, childrens’ toys made of lead, or banned food products, Customs and Border Protect (CBP) admitted yet again.
From CBPs online magazine Frontlines on Oct. 23:
“We’ve encountered shipments that have been declared as footwear and jackets, but found smuggled beef, pork, and poultry animal products instead,” said Andrew Renna, Assistant Port Director for Cargo Operations at JFK Airport. “The products are prohibited in the United States because of the risk of foreign animal disease. Should an animal disease outbreak occur in the United States, it could have a significant impact on the U.S. economy.” He said that as of October, CBP agents seized over 33,000 pounds of prohibited animal products that came into the country duty free via de minimis at JFK International Airport in New York City. Many of the countries where these shipments originated are known to have African swine fever, foot-and-mouth disease, and avian influenza or bird flu. “The beef, pork, and poultry industries are collectively worth over $200 billion annually in the U.S. and they support millions of jobs. So in just this one area, where de minimis is being exploited, it’s harmful to our domestic agriculture supply,” he said.
Sal Ingrassia, who as Port Director at JFK Airport oversaw about one-third of the de minimis shipments to the U.S., was quoted by International Trade Today saying that “One quarter of what we looked at had some type of violation,” and “It was alarming to see we had so many violations.” The reason this was so alarming is because he was referring specifically to de minimis shipments that entered through CBP’s voluntary “enhanced data” pilot known as Type 86 Entry.
This is the equivalent of finding that 1 out of 4 trucks in the secure “trusted trader” lane at the border were violating customs laws.
Worse yet, Ingrassia said that for another 25% of the packages, CBP asked the company to hold the package so CBP could inspect it, but when CBP got there, the package had already been released. This is the equivalent of another 1 of those 4 trucks simply running the border even after being waived over to secondary inspection by a border guard.
If this happened at a land border, the entire port would be shut down immediately until the situation was resolved.
Violations include misclassification of contents, insufficient documentation, or more serious violations, like smuggling narcotics and weapons to states where those weapons were not legal to purchase. Andrew Renna, assistant port director for JFK, said “de minimis keeps me awake at night.”
CPA chief economist Jeff Ferry estimated de minimis imports were valued at $128 billion in 2022. It must be even more today.
“Bad actors are exploiting the de minimis environment to move materials used to produce synthetic drugs — like fentanyl and its analogues — and other contraband into the United States,” CBP Acting Commissioner Troy Miller said on May 31. Less than two months later, CBP officers at the Port of Louisville in Kentucky seized three shipments containing a total of 2,387 pieces of fake, luxury branded jewelry bearing the brand names Gucci and Van Cleef and Arpels, to name a few. If genuine, the items would have had a combined Manufacturer’s Suggested Retail Price (MSRP) of over $10.08 million.
A recent two-part Reuters investigation into de minimis highlighted the ways the trade rule is used to facilitate duty free shipment of narcotics and drug making tools into the U.S. It’s complete lawlessness in the guise of facilitating America’s hyper passion for cheap consumer goods purchased online.
The Coalition for a Prosperous America, together with other groups such as the National Sheriff’s Association, sent a letter to the House Ways & Means Committee in May about de minimis being used to import narcotics.
In January 2023, U.S. federal agents raided the home of a Tucson maintenance worker who had a side hustle hauling packages across the border to Mexico. They estimate that over the previous two years, the gray-bearded courier had ferried about 7,000 kilos of fentanyl-making chemicals to an operative of the Sinaloa Cartel. That’s 15,432 pounds, sufficient to produce 5.3 billion pills – enough to kill every living soul in the United States several times over. The chemicals had traveled by air from China to Los Angeles, were flown or ground-shipped to Tucson, then driven the last miles to Mexico by the freelance delivery driver. What fed this circuitous route – a 2016 trade law supported by major parcel carriers and e-commerce platforms that made it easier for imported goods, including those fentanyl ingredients, to enter the United States (duty free). Transporting goods is largely an honor system that’s easy for bad actors to exploit. Senders are supposed to tell the truth about what’s inside the boxes they export. But shipping documents are easy to falsify, and contraband fairly simple to camouflage. Authorities can’t inspect every box without bringing global commerce to a halt.
Customs Admits Yet Again That De Minimis is Loaded with Fake Goods, and Banned Goods
De minimis, a customs rule that allows for duty free shipment and minimal inspection if the overseas vendor claims the value is under $800, is a haven for contraband, whether it’s fake Nikes, childrens’ toys made of lead, or banned food products, Customs and Border Protect (CBP) admitted yet again.
From CBPs online magazine Frontlines on Oct. 23:
“We’ve encountered shipments that have been declared as footwear and jackets, but found smuggled beef, pork, and poultry animal products instead,” said Andrew Renna, Assistant Port Director for Cargo Operations at JFK Airport. “The products are prohibited in the United States because of the risk of foreign animal disease. Should an animal disease outbreak occur in the United States, it could have a significant impact on the U.S. economy.” He said that as of October, CBP agents seized over 33,000 pounds of prohibited animal products that came into the country duty free via de minimis at JFK International Airport in New York City. Many of the countries where these shipments originated are known to have African swine fever, foot-and-mouth disease, and avian influenza or bird flu. “The beef, pork, and poultry industries are collectively worth over $200 billion annually in the U.S. and they support millions of jobs. So in just this one area, where de minimis is being exploited, it’s harmful to our domestic agriculture supply,” he said.
Sal Ingrassia, who as Port Director at JFK Airport oversaw about one-third of the de minimis shipments to the U.S., was quoted by International Trade Today saying that “One quarter of what we looked at had some type of violation,” and “It was alarming to see we had so many violations.” The reason this was so alarming is because he was referring specifically to de minimis shipments that entered through CBP’s voluntary “enhanced data” pilot known as Type 86 Entry.
This is the equivalent of finding that 1 out of 4 trucks in the secure “trusted trader” lane at the border were violating customs laws.
Worse yet, Ingrassia said that for another 25% of the packages, CBP asked the company to hold the package so CBP could inspect it, but when CBP got there, the package had already been released. This is the equivalent of another 1 of those 4 trucks simply running the border even after being waived over to secondary inspection by a border guard.
If this happened at a land border, the entire port would be shut down immediately until the situation was resolved.
Violations include misclassification of contents, insufficient documentation, or more serious violations, like smuggling narcotics and weapons to states where those weapons were not legal to purchase. Andrew Renna, assistant port director for JFK, said “de minimis keeps me awake at night.”
CPA chief economist Jeff Ferry estimated de minimis imports were valued at $128 billion in 2022. It must be even more today.
“Bad actors are exploiting the de minimis environment to move materials used to produce synthetic drugs — like fentanyl and its analogues — and other contraband into the United States,” CBP Acting Commissioner Troy Miller said on May 31. Less than two months later, CBP officers at the Port of Louisville in Kentucky seized three shipments containing a total of 2,387 pieces of fake, luxury branded jewelry bearing the brand names Gucci and Van Cleef and Arpels, to name a few. If genuine, the items would have had a combined Manufacturer’s Suggested Retail Price (MSRP) of over $10.08 million.
A recent two-part Reuters investigation into de minimis highlighted the ways the trade rule is used to facilitate duty free shipment of narcotics and drug making tools into the U.S. It’s complete lawlessness in the guise of facilitating America’s hyper passion for cheap consumer goods purchased online.
The Coalition for a Prosperous America, together with other groups such as the National Sheriff’s Association, sent a letter to the House Ways & Means Committee in May about de minimis being used to import narcotics.
In January 2023, U.S. federal agents raided the home of a Tucson maintenance worker who had a side hustle hauling packages across the border to Mexico. They estimate that over the previous two years, the gray-bearded courier had ferried about 7,000 kilos of fentanyl-making chemicals to an operative of the Sinaloa Cartel. That’s 15,432 pounds, sufficient to produce 5.3 billion pills – enough to kill every living soul in the United States several times over. The chemicals had traveled by air from China to Los Angeles, were flown or ground-shipped to Tucson, then driven the last miles to Mexico by the freelance delivery driver. What fed this circuitous route – a 2016 trade law supported by major parcel carriers and e-commerce platforms that made it easier for imported goods, including those fentanyl ingredients, to enter the United States (duty free). Transporting goods is largely an honor system that’s easy for bad actors to exploit. Senders are supposed to tell the truth about what’s inside the boxes they export. But shipping documents are easy to falsify, and contraband fairly simple to camouflage. Authorities can’t inspect every box without bringing global commerce to a halt.
Prior to the de minimis threshold for duty free shipment was raised to $800 per package, some 134 million small packages entered the country. By 2023, the total hit more than 1 billion packages. So far this year, some 1.4 billion small packages have entered the country as of early autumn. How many dogs and x-rays would CBP need to screen 1 billion packages, or roughly 2.7 million packages per day?
Online shopping is mostly to blame, with the growth of Amazon Marketplace, and other platforms like Temu and Shein, the direct-from-China shopping experience has radically increased the number of small package imports.
Washington’s Attempt To Stop De Minimis Flood “Long Overdue”
Washington is trying to stop the influx of small packages flooding into the U.S. via de minimis.
Numerous members of Congress have proposed bills to do just that, led by Earl Blumenauer (D-OR3), who has been the lead steer on this in the House of Representatives.
A bipartisan group of Senators and Representatives have come up with their own bills. Senators Sherrod Brown (D-OH) and Rick Scott (R-FL) have even called for the de minimis loophole to be shut down altogether. Nothing has passed yet.
In September, the White House issued new rulemaking in an attempt to stem the tide. However, the Biden administration said it is up to Congress to come up with better legislation to govern de minimis going forward.
The Biden administration said the surge in de minimis shipments, “put American consumers, workers, retailers, and manufacturers at risk.”
The White House said Congress should make at least two key changes to de minimis:
CPA applauded Biden’s attention to de minimis but said these rules are now “long overdue.”
Excluding China may be politically feasible, but it will not be enough to slow the flood that will inevitably engulf most American shopping malls and small retail shops.
For exaxmple, in September 2023, CBP ran a one-week special operation called Operation Blind Spot, targeting contact lenses from South Korea. Several ports of entry participated.
“We conducted 41 examinations at the international mail facility and 50 examinations at the express courier hub (in Los Angeles). Out of the 91 targeted exams, 100% did not meet FDA regulatory requirements. In other words, none of the contact lenses met American safety standards,” Thomas Reis, CBP’s Section Chief for Trade Enforcement at Los Angeles International Airport, was quoted saying in Frontline magazine.
American companies are also beneficiaries of de minimis. It is these companies that are speeding up the direct-from-China trend in consumer retail markets.
For example, Amazon plans to ship orders direct to U.S. customers from a facility in Guangdong, China now. The company said it was charging sellers lower fulfillment fees for items sold through a new, lower cost online storefront they are building to compete with Temu.
“We are always exploring new ways to work with our selling partners to delight our customers with more selection, lower prices and greater convenience,” an Amazon spokesperson told Reuters this week.
In August, CPA trade counsel Charles Benoit said Amazon’s new low-cost store strategy would accelerate the deluge of small packages coming into the U.S.
“From a lobbying perspective, the hope was that Shein and Temu’s fleet of 88 Boeing 777 freighters leaving China daily packed with de minimis shipments would convince Amazon to abandon its support of de minimis,” Benoit said.
Amazon built its business by developing an extensive domestic warehouse and fulfillment business, which can’t make use of de minimis shipments as most of those goods came in via formal entry – in large containers on merchant marine vessels. A 2023 analysis estimated that Amazon operates 305 large warehouses in the United States, but now Amazon is closing some of its U.S. warehouses and hoping to mimic Shein and Temu.
But now Amazon appears content to settle for being an also-ran to Temu and Alibaba, another Chinese e-commerce behemoth banking on de minimis surviving Washington’s hawkish China rhetoric and new rules.
Meanwhile, claims from some on Capitol Hill that “more info will help fix this” must be met with maximum pushback, Benoit said. “We’ve already done that,” he said.
China Post provides advanced electronic data for 99% of mail packages it ships here. Express shippers like FedEx and UPS do the same. Calls for more info are a stalling tactic; a refusal to acknowledge the reality of reviewing millions of small package imports daily.
“Even if we had perfect, unlimited, truthful, accurate information for the millions of daily shipments, policing millions of small shipments doesn’t work,” Benoit said. “That’s because the manpower resources needed to intercept a single package among 10,000 on an airplane tagged as a t-shirt containing forced-labor cotton is too much.”
Back to the October article in Frontlines, CBPs Renna said there has not been any significant changes to the regulatory requirements of de minimis since 1995, adding that, “The trade landscape has changed dramatically over the last 30 years. The framework that’s in place no longer works.” This comment comes not long after the White House changed some rules.
JFK Airport in New York receives about 23% of the total U.S. de minimis shipments. For Renna, “JFK is all de minimis all the time. I eat, sleep and think de minimis. De minimis keeps me awake at night.”
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