Senate Finance Committee Chairman Ron Wyden (D-Ore) has introduced much-anticipated bipartisan legislation to tighten imports requirements for low-value packages in order to close the so- called de minimis loophole.
The bill would prohibit the use of the $800 de minimis threshold to import certain types of goods, including goods that are import-sensitive or subject to additional trade remedies.
This would not only level the playing field for US manufacturers by ensuring that tariffs are being enforced, but would also encourage a shift back to container shipments and reduce the volume of individual packages entering under de minimis, according to a summary of the bill
The legislation also would improve oversight of the de minimis entry process by requiring CBP to collect more information about commercial packages, facilitating the targeting and seizure of illicit goods, and increasing penalties for bad actors.
The White House recently unveiled a new initiative to keep shipments of illegal opioids out of the United States. In its proposal, the White House put the onus on Congress to close the de minimis loophole.
But President Biden could take care of the problem immediately, Sen. Brown said. The President has authorities under the Tariff Act of 1930 to end the abuse of the de minimis loophole. While legislation would solidify a de minimis loophole fix into law, executive action from the Administration will work more quickly, the senator said.
“Foreign corporate giants are inundating our borders with millions of low-value packages, making it tough for customs agents to stop dangerous goods like fentanyl from falling into Americans’ hands,” Wyden said. “Americans should feel confident that anything arriving on their doorstep is safe, legal, and ethically produced. Our legislation would crack down on foreign companies abusing the law and make sure they play by the rules.”
The Bill's product exclusions deftly sidestep a full frontal assault on Amazon, whose Marketplace model is a major beneficiary of the de minimis loophole. China-based sellers represent nearly 50% of the top 10,000 sellers on Amazon in the U.S, according to Marketplace Pulse Research.
Amazon is reported to be building out its Chinese supplier newtork to create a low-price direct sales model to compete with Shein and Temu. This new Amazon channel, expected this Fall, as well as the two Chinese fast-fashion juggernauts, will be directly impacted by the proposed rules.
The Fighting Illicit Goods, Helping Trustworthy Importers, and Netting Gains (FIGHTING) for America Act would tighten the rules and improve oversight of the de minimis entry process by
(1) requiring CBP to collect more information about commercial packages,
(2) facilitating the targeting and seizure of illicit goods, and
(3) increasing penalties for bad actors.
Additional sponsprs include Sen. Cynthia Lummis, R-Wyo., Sen. Sherrod Brown, D-Ohio, Sen. Susan Collins, R-Maine, and Sen. Bob Casey, D-Pa.,
Kim Glas, president of the National Council of Textile Organizations applauded the legislation. “The bill is by far the most comprehensive legislative proposal to date that would impose new penalties for violations, require additional data reporting on all de minimis packages, and impose a small customs user fee on packages.
This legislation is supported by Oregon AFL-CIO, AFL-CIO, National Council of Textile Organizations (NCTO), Parents Against Vaping e-Cigs (PAVe), Voices for Awareness | Facing Fentanyl Now, National Association of Police Organizations, Fraternal Order of Police, United Steelworkers (USW), United States Footwear Manufacturers Association (USFMA), National Treasury Employees Union, and the Outdoor Industries Association.
A one-pager is available here. A section-by-section outline of the legislation is available here. The text of the bill is here.
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