Blumeanuer responded saying: “This is something that I think we can get beyond the passion, get beyond the back and forth on this. We don’t have to settle for a first step. We understand the challenge. I disagree that this is the best we can do. Over three million packages enter the U.S., uninspected, untaxed, and they undercut U.S. businesses, undercut product safety regulations and of course are a source of narcotics shipments. This proposal won’t address a lot of the problems.”
On Monday, the National Association of Police Organizations cautioned against half measures on de minimis, reiterating it should be fully closed and all goods need to come into the country via formal entry.
In January, Blumenauer presented the Committee with a letter that 13 Republican Attorneys General wrote to President Biden about de minimis, citing concerns about drugs coming in duty free by mail.
His plea was not enough, with some Republicans asking how cutting China out entirely from de minimis would stop fentanyl shipments by mail that come in from Mexico. Blumenauer responded that by eliminating China entirely from de minimis, the volume of de minimis shipments would go down drastically, resulting in far less harmful contraband and narcotics entering the United States.
By volume of shipment, de minimis packages constitute over ninety percent of shipments to the United States.
Chairman Smith’s trade counsel said that some 69% of first quarter 2024 de minimis packages were from China and that they suspect a 37% reduction in de minimis shipments from China if the bill becomes law.
After the imposition of the 301 tariffs, Smith’s trade counsel said that China shipments via de minimis rose 94%.
There were some questions about those numbers, with Rep. David Schweikert (R-AZ-1) asking if the increase was due to the pandemic-era lockdowns when e-commerce shipments skyrocketed. No specific data was available on that, but Smith’s trade counsel seems to think that some of the de minimis shipments evading tariffs will then come in via formal entry and pay the tariff, which can be as high as 25%, while some of the trade will be transshipped, and some of the de minimis shipments will stop if the bill became law.
“I’ve been trying to find progress on de minimis. No Chairman of this Committee has discussed this issue more,” Chairman Smith said, acknowledging Blumenauer’s work in informing the body on the topic in the first place. “Your bill that passed here would not make it in the Senate and we want something they take up,” he told Blumenauer.
Bluemanuer said the Chairman of the Senate Finance Committee, Ron Wyden (D-OR) was “very interested” in his take on de minimis now.
“Two years ago, we didn’t have the momentum we have now. We didn’t hear from the textile industry on this; we didn’t hear from the police on this,” Blumenauer said in a last ditch effort to get his amendment in the bill.
The Murphy bill passed along party lines with 24 Republicans in favor and 18 Democrats against. This is a number that would repeat itself throughout the day on other trade related bills.
End China’s De Minimis Abuse Act now moves to the House for a floor vote.
In introducing the Act, Rep. Murphy said North Carolina textiles were being put out of business because of a flood of fabrics coming in via de minimis.
“We are home to a robust textile industry and unfortunately several mills have closed and several thousands of workers have been laid off because of de minimis,” he said. Cut and sew apparel, including woven fabrics, are subject to tariffs and the Uyghur Forced Labor Prevention law.
“Our outdated de minimis law has devastated American companies that have had to compete unfairly with China,” Murphy said.
In the last few years, entire business models have been established by China to benefit from de minimis rules. Shein and Temu are the lead steers in this regard, and some of their goods will fall under Murphy’s restrictions
“These companies can also use de minimis to evade tariffs, causing billions in lost revenues,” Murphy said.
Republicans Block Democrats’ Policy of Denying De Minimis Treatment for Chinese Merchandise
‘De minimis’ in customs law has caused lawlessness at our ports. CBP estimates that everyday, over 30,000 small packages pass through our ports that violate our laws and contain contraband and even the most potent synthetic opioids. They are sent by unaccountable, foreign, judgment-proof vendors directly to U.S. households.
In 2022, during the last Congress, House Democrats passed the Import Security and Fairness Act, which would deny de minimis treatment for all Chinese merchandise. This legislation was championed by Rep. Earl Blumenauer (D-OR-3), then Chairman of the Ways & Means Trade Subcommittee.
Now, Republicans control the House, and they introduced their own de minimis bill, titled the End China’s De Minimis Abuse Act (H.R. 7979). The bill, which was introduced on April 15 by Rep. Greg Murphy (R-NC-3), less than 48 hours before Wednesday’s hearing, opts to disqualify shipments from de minimis treatment only if the goods are subject to certain trade remedies, most notably Section 301 tariffs. This is a far narrower approach, relying mainly on overseas vendors to honestly and accurately provide an eight-digit Harmonized Tariff System code for every piece of merchandise.
In a long and passionate plea from a heated exchange between Blumenauer and Republicans on the committee, Blumenauer made the point that there was sufficient support in the House for a total-China ban given that House Democrats had already passed his legislation back in 2022 as part of the asked how it could be that the House had already passed his version of de minimis legislation in the America Competes Act. of 2022 and now rejects it as an amendment.
Chairman Jason Smith said that it didn’t pass muster with the Senate last time and was removed from the Senate China bill.
Back in 2022, Blumenauer’s de minimis bill was part of a larger trade package. The Senate’s trade package back then, included in what was then known as the United States Innovation and Competition Act, contained many sweetheart provisions for Chinese vendors and importers generally. So in reconciliation, with a wide gulf between the House and Senate trade packages, the resulting CHIPS & Sciences Act omitted any trade package.
Republicans on the House Ways & Means Committee voted down an amendment by Blumenauer that would have banned Chinese goods completely from the $800 de minimis loophole. Vendors in China are the biggest users, aided by e-commerce platforms Shein, Temu, and Amazon.
Ways & Means Chairman Smith conceded that the Republicans’ bill didn’t go as far, framing it as a “first step.”
Blumeanuer responded saying: “This is something that I think we can get beyond the passion, get beyond the back and forth on this. We don’t have to settle for a first step. We understand the challenge. I disagree that this is the best we can do. Over three million packages enter the U.S., uninspected, untaxed, and they undercut U.S. businesses, undercut product safety regulations and of course are a source of narcotics shipments. This proposal won’t address a lot of the problems.”
On Monday, the National Association of Police Organizations cautioned against half measures on de minimis, reiterating it should be fully closed and all goods need to come into the country via formal entry.
In January, Blumenauer presented the Committee with a letter that 13 Republican Attorneys General wrote to President Biden about de minimis, citing concerns about drugs coming in duty free by mail.
His plea was not enough, with some Republicans asking how cutting China out entirely from de minimis would stop fentanyl shipments by mail that come in from Mexico. Blumenauer responded that by eliminating China entirely from de minimis, the volume of de minimis shipments would go down drastically, resulting in far less harmful contraband and narcotics entering the United States.
By volume of shipment, de minimis packages constitute over ninety percent of shipments to the United States.
Chairman Smith’s trade counsel said that some 69% of first quarter 2024 de minimis packages were from China and that they suspect a 37% reduction in de minimis shipments from China if the bill becomes law.
After the imposition of the 301 tariffs, Smith’s trade counsel said that China shipments via de minimis rose 94%.
There were some questions about those numbers, with Rep. David Schweikert (R-AZ-1) asking if the increase was due to the pandemic-era lockdowns when e-commerce shipments skyrocketed. No specific data was available on that, but Smith’s trade counsel seems to think that some of the de minimis shipments evading tariffs will then come in via formal entry and pay the tariff, which can be as high as 25%, while some of the trade will be transshipped, and some of the de minimis shipments will stop if the bill became law.
“I’ve been trying to find progress on de minimis. No Chairman of this Committee has discussed this issue more,” Chairman Smith said, acknowledging Blumenauer’s work in informing the body on the topic in the first place. “Your bill that passed here would not make it in the Senate and we want something they take up,” he told Blumenauer.
Bluemanuer said the Chairman of the Senate Finance Committee, Ron Wyden (D-OR) was “very interested” in his take on de minimis now.
“Two years ago, we didn’t have the momentum we have now. We didn’t hear from the textile industry on this; we didn’t hear from the police on this,” Blumenauer said in a last ditch effort to get his amendment in the bill.
The Murphy bill passed along party lines with 24 Republicans in favor and 18 Democrats against. This is a number that would repeat itself throughout the day on other trade related bills.
End China’s De Minimis Abuse Act now moves to the House for a floor vote.
In introducing the Act, Rep. Murphy said North Carolina textiles were being put out of business because of a flood of fabrics coming in via de minimis.
“We are home to a robust textile industry and unfortunately several mills have closed and several thousands of workers have been laid off because of de minimis,” he said. Cut and sew apparel, including woven fabrics, are subject to tariffs and the Uyghur Forced Labor Prevention law.
“Our outdated de minimis law has devastated American companies that have had to compete unfairly with China,” Murphy said.
In the last few years, entire business models have been established by China to benefit from de minimis rules. Shein and Temu are the lead steers in this regard, and some of their goods will fall under Murphy’s restrictions
“These companies can also use de minimis to evade tariffs, causing billions in lost revenues,” Murphy said.
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