By closing the trade loophole, the bill aims to create a level playing field for American manufacturers, safeguard consumers from counterfeit goods, and combat drug trafficking. Credit: Shutterstock – Freer

The De Minimis Reciprocity Act of 2023, introduced by US Senators Bill Cassidy, M.D and Tammy Baldwin, seeks to address the abuse of trade laws by Communist China and other nations, which currently allows them to import small dollar goods into the US duty-free. By barring Chinese exports from the expedited “de minimis” channel and adjusting the threshold for duty-free imports to match that of trade partners, the proposed legislation aims to foster reciprocity and enhance transparency at US borders.

It has long been a bugbear of US lawmakers that Chinese firms including Shein and Temu are using the de minimis loophole in US trade law as a way to skirt the UFLPA and continue selling goods under $800 made with Uyghur forced labour to American consumers.

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Senator Cassidy highlighted the necessity of the bill and believes the current US customs laws are outdated and have provided an opportunity for China to import billions of dollars’ worth of inexpensive products into the country without proper oversight, adding: “This bill will allow US manufacturers to compete fairly for US store shelves and counter those who wish to use our trade system to launder money or smuggle counterfeits and drugs.”

Senator Baldwin emphasised the impact of trade loopholes, allowing Chinese companies to import goods without proper oversight, thus enabling the influx of cheap counterfeit products that undercut American manufacturers and contribute to drug trafficking. She continued: “Our bipartisan bill will close this loophole to create a level playing field for our Made in America manufactures, curb the illicit drugs like fentanyl from coming into the country, and help ensure Americans are not supporting goods made with forced labour.”

Under current regulations, the de minimis threshold, which exempts goods from duties, stands at $800 for all imports entering the US. Consequently, any item with a claimed value below $800 can enter US markets duty-free and with minimal customs scrutiny. The proposed De Minimis Reciprocity Act seeks to address this issue and introduce the following measures:

  1. Exclude untrustworthy countries from using the “trusted” de minimis channel.
  2. Only allow express carriers to facilitate de minimis imports into the US to help better stop counterfeits and fentanyl at the border.
  3. Require more information on every package entering the US.
  4. Use the revenue proceeds to establish a fund for reshoring the industry from China. 

The Import Security and Fairness Act of Ohio

US Senators Sherrod Brown and Marco Rubio, along with US. Representatives Earl Blumenauer and Neal Dunn have introduced the Import Security and Fairness Act. The bill aims to address a critical trade loophole that foreign companies exploit to evade duties and fees, giving them an unfair advantage over Ohio businesses.

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“The de minimis loophole is a threat to American competitiveness, consumer safety, and basic human rights,” said Representative Blumenauer. “It is used by primarily Chinese companies to ship over two million packages a day into the US. It puts American businesses at a competitive disadvantage while flooding American consumers with undoubtedly harmful products. There is virtually no way to tell whether packages that come in under the de minimis limit contain products made with forced labour, intellectual property theft, or are otherwise dangerous. It is time to close this loophole once and for all.”

Senator Rubio said: “China exploits our capital markets and uses slave labour to undercut American businesses.”

“It is bad for our country to let China flood it with duty-free packages using the de minimis exception. The Import Security and Fairness Act will close this loophole and take another critical step to stop China from cheating on trade.”

National Council of Textile Organisations president and CEO Kim Glas added: “We applaud Senator Brown’s leadership in the Senate in introducing this important bill, which would effectively prohibit China and Russia from exploiting the Section 321 de minimis mechanism in US trade law.”

“This gaping loophole allows more than 2 million shipments a day to enter the US market duty-free and largely uninspected, which in turn severely undermines the competitiveness of US textile manufacturers and workers, as well as our Western Hemisphere trade partners. It also endangers American consumers by allowing tainted products like those made with forced labour and counterfeits to land on our doorsteps. We look forward to continuing to work with Senator Brown and Senator Rubio on their legislation to address this serious problem.”

Apparel imports to the US from China saw the biggest decline of the top 10 major suppliers as fashion brands look to reduce their China exposure.