NCTO supports call for greater scrutiny of the de minimis loophole. Credit: Shutterstock.

The National Council of Textile Organisations (NCTO) has welcomed a call from Congressman Jeff Duncan for the US government to clamp down on the Section 321 de minimis loophole, noting that nearly three million de minimis shipments enter the US each day.

“Tariff-free imports skyrocketed in FY23 with more than one billion packages claiming de minimis preferences in the US,” said Congressman Duncan.

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He continued: “Mass distributors are using e-commerce to abuse the de minimis provision to avoid billions of dollars of tariffs designed to put American manufacturers on a fair playing ground.

“The Biden Administration has the authority to close the Section 321 de minimis loophole to stop the economic harm being caused. US manufacturers who are seeing a substantial erosion of market share, US workers who are losing their jobs, and small retailers who cannot compete all realise that forced labour supply chains in China, as well as drug traffickers, are benefitting from these loopholes while American jobs are put in jeopardy.”

NCTO president and CEO Kim Glas added: “On behalf of the US textile industry, I would like to sincerely thank Rep. Duncan for his letter to President Biden, voicing his concerns over the alarming rise in e-commerce shipments flooding our market through the Section 321 de minimis provision in US trade law, which facilitates the importation of goods made with forced labour, illicit narcotics such as fentanyl, and counterfeit products, all of which are threatening the health and safety of American consumers and undermining the domestic textile manufacturing industry.

“An explosion in e-commerce shipments has created a superhighway of orders through this gaping loophole, allowing nearly three million packages a day to come into the US duty-free and largely uninspected, effectively handing a free trade agreement to China and the rest of the world.

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“The problem has been compounded by China’s predatory trade practices, anaemic customs enforcement in the US, and lack of rulemaking and penalties. The Executive Branch must decisively act now and use its existing executive authorities to close this extremely dangerous loophole to e-commerce shipments to stop the flow of billions of dollars worth of Chinese apparel tainted by forced labour and illicit narcotics from reaching our homes. The stakes are too high to continue ignoring this glaring problem. We risk losing a vital domestic manufacturing base and putting consumers’ lives at risk if the administration does not act now.”