{"id":1202,"date":"2023-06-20T16:03:16","date_gmt":"2023-06-20T23:03:16","guid":{"rendered":"https:\/\/savingusmanufacturing.com\/blog\/?p=1202"},"modified":"2023-06-20T16:03:16","modified_gmt":"2023-06-20T23:03:16","slug":"congress-must-stop-abuse-of-de-minimis-imports","status":"publish","type":"post","link":"https:\/\/savingusmanufacturing.com\/blog\/tradepolicy\/congress-must-stop-abuse-of-de-minimis-imports\/","title":{"rendered":"Congress Must Stop Abuse of De Minimis Imports"},"content":{"rendered":"\n

When you order a product online without country-of-origin information being provided, the product may be sent directly to you by a company in a foreign country.  If the product is under $800 in value, it isn\u2019t inspected by Customs & Border Protection (CBP) and no duties or tariffs are charged. How does this happen?<\/p>\n\n\n\n

A White Paper, titled \u201cTrade and Tariffs<\/a>\u201d on the website of the Coalition for a Prosperous America explains: \u201cDe minimis imports are the gateway for every fly-by-night foreign vendor to ship directly into the United States. When a package receives de minimis treatment, it arrives without the need of a customs broker or bond, without paying any tariffs or taxes, and without meaningful possibility of regulatory oversight.\u201d [\u201cde minimis\u201d is Latin for \u201ctoo trivial or minor to merit consideration.\u201d]<\/p>\n\n\n\n

The de minimis rule was added as Section 321 to the Tariff Act of 1930…The 1938 Congress set low-dollar thresholds for three different importation scenarios, assigning a $5 threshold for bonafide gifts and personal effects travelers brought with them, and a $1 de minimis for any other situation\u2026There are three types of import situations covered by De minimis:<\/p>\n\n\n\n

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  1. \u2018Bona fide gifts\u2019 mailed to Americans from their friends and family abroad<\/li>\n\n\n\n
  2. Articles accompanying travelers from abroad for household use<\/li>\n\n\n\n
  3. A \u201ccatch all\u201d anything else provision to ensure no undue burden was spent.\u201d<\/li>\n<\/ol>\n\n\n\n

    The law\u2019s opening line states its purpose: \u201cto avoid expense and inconvenience to the Government disproportionate to the amount of revenue that would otherwise be collected.\u201d It was meant to serve as an administrative tool to ensure that customs officers aren\u2019t forced to do assessments on low-value goods which would end up costing the government more money than they would generate.\u201d

    \u201c For regular imports, the law requires importers to provide Customs & Border Protection (CBP) an advance manifest of the incoming cargo describing it. But de minimis shipments, including millions of e-commerce packages, typically arrive with no advance information. The information scrawled on the packages is often incomplete and unverifiable. CBP has to process a whopping 2 million of these shipments daily and does not have the capability to detect and seize illicit and dangerous goods.\u201d Goods eligible for de minimis treatment enter the U.S. free of duties and taxes.<\/p>\n\n\n\n

    For most of Section 321\u2019s history, the lowest threshold of $1 only rose to $5 by the 1990s. However, de minimis was increased to $200 by Congress in 1994, and in 2015, Congress raised the de minimis threshold to a whopping $800 after intense lobbying by express consignment companies like FedEx and UPS and e-commerce sites like Amazon and eBay. In comparison, China\u2019s de minimis is 50 yuan, which is less than $8 USD.

    The CPA paper states, \u201cThe predictable result is a major calamity putting U.S. producers and traditional retailers out of business and destroying jobs. Our permissiveness is also causing lawlessness at the ports, allowing a tidal wave of counterfeit and dangerous goods to flood in.\u201d<\/p>\n\n\n\n

    Not only are U.S. companies and workers subjected to a new level of job-destroying competition but dangerous illicit drugs, such as fentanyl, and counterfeit goods are shipped directly to US consumers while evading detection.<\/p>\n\n\n\n

    In 2022, the U. S. had a trade deficit<\/a> with China of $382.9 billion <\/strong>up from $353.4 billion <\/strong>in 2021, but down from a high of $418.2 billion <\/strong>in 2018. The question is:  If de minimis imports were counted, wouldn\u2019t they increase our trade deficit with China?<\/p>\n\n\n\n

    The answer is \u201cyes.\u201d  On May 15, 2023, Jeff Ferry, CPA\u2019s Economist, released an analysis<\/a> that found that the impact of de minimis on the U.S. economy is large and getting larger.  Key findings were:<\/p>\n\n\n\n