Brown says tariffs have been one way to counter unfair foreign competition but the de minimis loophole has allowed a way to “cheat” the system. Credit: Shutterstock.

Brown joined manufacturers, retailers, law enforcement, and workers at MMI Textiles in Brooklyn, Ohio to push for the Biden administration to close the loophole he said allows foreign countries like China to exploit and avoid paying duties and fees they owe.

Brown has introduced bipartisan legislation to address the problem, and says he has repeatedly called on President Biden to take executive action to close the loophole.

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“We know what a problem unfair foreign competition is for Ohio companies, particularly from China. Tariffs have been one way to counter this and level the playing field for American manufacturing, but this de minimis loophole is yet another way for China to cheat,” said Brown. “And because these packages enter the US with minimal inspection, drug traffickers are also exploiting the de minimis loophole to send deadly drugs like fentanyl into our country without any detection.”

At present packages under $800 in valuation are exempted from US duties, taxes, and fees, and are allowed to enter the country with little or no inspections.

Campaigners say the number of packages using this loophole to avoid duties has soared recently to more than three million packages per day which often include counterfeit items and goods made under questionable labour conditions. They say urgent action is needed to prevent unfair competition and exploitation of US manufacturers.

“The de minimis loophole continues to wreak havoc on an already fragile textile industry due to fast fashion imports that get duty-free access to the USA. Our US textile industry is vital for the country to provide an industrial base to the military and PPE sectors,” said Amy Bircher Bruyn, CEO of MMI Textiles.

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She added: “Sherrod Brown does hard work to make sure American manufacturing is prioritised. Our industry is resilient, and we have survived a litany of changes over the past four decades, but we are rewarding China at the expense of our nation’s manufacturing jobs.”

Michael Stumo, CEO of the Coalition for a Prosperous America, said: “The de minimis loophole also makes a mockery of the Uyghur Forced Labor Prevention Act and efforts to prohibit Chinese imports made with forced labour. We thank senator Brown for recognising that this dangerous loophole must be closed.”

Though the de minimis loophole remains a thorn in the side of the US apparel and textiles industry, a new study from economists at Yale and UCLA suggested removing the de minimis exemption on US imports would disproportionately impact low-income families.