The call for the permanent end of de minimis is one of the four actions stated by the group of industry leaders and advocates, which includes the National Council of Textile Organizations (NCTO) and the Alliance for American Manufacturing and American Federation of Labor and Congress of Industrial Organizations (AFL-CIO)
The other three actions include prohibiting de minimis shipments for commercial purposes from all countries to prevent a shift in the source of these unchecked imports; mandating comprehensive documentation for all imports to facilitate tariff collection and effective inspection; and establishing robust customs enforcement standards that align with the capacity of US Customs and Border Protection (CBP) to screen and regulate imports effectively.
Go deeper with GlobalData
In a letter addressed to President Trump, the coalition said: “We write to ask you to reimpose your proposed ban on duty-free de minimis treatment for goods from China and to use your existing executive authority granted to the president by Congress in the Tariff Act of 1930 to end de minimis for all commercial shipments from all countries.”
The coalition outlined the detrimental impact of the current de minimis regulation, which permits merchandise valued at $800 or less per individual each day to be imported into the US without duty charges and with minimal inspection. This bypasses standard customs procedures and data reporting requirements.
The coalition explains that de minimis was originally designed for tourists returning with souvenirs. However, it adds this rule is now being manipulated by large corporations and retailers to import counterfeit apparel and pharmaceuticals, hazardous infant products and toys, imitation automotive components, and goods produced through forced labour directly to consumers.
The letter adds that this practice undermines local manufacturers and retailers as well as the broader US workforce involved in domestic production and sales.
“De minimis shipments from China enter the US duty-free and avoid tariffs imposed as a result of trade and national security actions, such as the Section 301 China tariffs, which aim to address unreasonable or discriminatory policies or practices that burden or restrict US commerce. Most apparel shipments from China, for example, would be subject to higher duties and Section 301 tariffs if they did not enter the United States under the de minimis exemption. The evasion of these tariffs means billions of dollars of lost revenue for the US Treasury,” the coalition point out.
The volume of de minimis shipments into the US has surged from 139m in fiscal year 2015 to over 1bn.
The coalition claims online fast fashion giants are exploiting the provision and represent 30% of all de minimis imports.
The coalition’s initiative is backed by over 30 organisations seeking reform in trade law enforcement.
“The only way to enable effective control of goods entering the United States is to close the loophole to commercial shipments across the board. Our coalition looks forward to being a resource to you and your administration on this critical issue,” the coalition said.
