WASHINGTON — The Coalition for a Prosperous America (CPA) today applauded new legislation introduced by U.S. Senator Bill Cassidy (R-LA), along with U.S. Senators Tammy Baldwin (D-WI) and J.D. Vance (R-OH) that makes changes to an import rule known as the “de minimis” exemption.
The bill will limit the damage from the increasingly notorious de minimis loophole that enables foreign vendors anywhere in the world to ship into the United States without submitting to basic customs declarations or paying the duties U.S. brick-and-mortar retailers are required to pay.
“De minimis is an ungovernable break in our customs controls, where over two million shipments per day enter the United States with little to no scrutiny,” said Michael Stumo, CEO of CPA. “By prohibiting de minimis imports via the mail, excluding merchandise from China for de minimis eligibility, and requiring Harmonized Tariff Schedule numbers for all de minimis imports, the widespread economic and social damage from de minims will be greatly constrained by this legislation.”
Originally meant as an administrative exemption for returning travelers and bona fide gifts, de minimis was transformed into a massive backdoor around our ports due to bad rule-making by past U.S. Treasury officials. This rule-making had the effect of allowing foreign businesses outside our jurisdiction to ship directly into the United States without a customs broker.
Earlier this month, U.S. Customs and Border Protection (CBP) reiterated prior warnings, stating:
- “The overwhelming volume of small packages and lack of actionable data limit CBP’s ability to identify and interdict high-risk shipments that may contain narcotics, merchandise that poses a risk to public safety, counterfeits, or other contraband.
- In FY 2022, CBP cleared over 685 million de minimis shipments with insufficient data to properly determine risk.”
Last Congress, CPA applauded U.S. Representative Earl Blumenauer’s (D-OR)’s Import Security and Fairness Act, which excluded merchandise from China for de minimis eligibility.
A poll of registered voters, conducted by Morning Consult on behalf of the CPA, shows an overwhelming majority (81%) of voters—including 79% of Democrats; 75% of Independents; 86% of Republicans—support the U.S. government prohibiting countries like China that pose a threat to American workers from using de minimis to export foreign-made goods to the U.S.
Last month, CPA CEO Michael Stumo testified at a U.S. House Ways & Means Committee hearing about the dangers of de minimis.
CPA’s Economics Team released an analysis that found that the impact of de minimis on the U.S. economy is large and getting larger. CPA estimates the value of de minimis imports into the U.S. at $188 billion last year, suggesting our actual trade deficit in 2022 was 16% higher than official figures show, and U.S GDP was slightly lower. Rising de minimis imports cost the U.S. hundreds of thousands of good-paying jobs and hurt the U.S. manufacturing and bricks-and-mortar retail sectors, and provide a superhighway for narcotics, counterfeits, and other contraband into our communities.
The Wall Street Journal called de minimis a “$67 billion tariff dodge.”
Fortune magazine called it Chinese fast fashion giant Shein’s “favorite tax loophole to test the Uyghur Forced Labor Prevention law.”
And The Economist magazine once called de minimis the “Swiss cheese” of America’s tariff wall against China.
