De Minimis Differences Proposed

The White House Sunday  issued two orders, adressing small parcel shipments from Canada and Mexico and the application of the de minimis exemption from customs duties.

The executive orders addressing trade duties at the northern (Canada) and southern (Mexico) borders share a structural and procedural similarity, but distinctions emerge in their treatment of de minimis duty-free exemptions and the underlying policy objectives.

Similarities

• Legal Framework: Both orders derive authority from the International Emergency Economic Powers Act, National Emergencies Act, Trade Act of 1974, and Title 3 of the U.S. Code.

• Conditional De Minimis Treatment: Both allow duty-free treatment under 19 U.S.C. 1321 for certain imports from Canada (Section 2(h)) and Mexico (Section 2(g)) until the Secretary of Commerce determines that sufficient tariff collection mechanisms are in place.

Policy Framing:

The northern border order explicitly addresses illicit drug flows, indicating a more targeted approach toward a specific security issue. The southern border order refers to the “situation” at the southern border, a broader phrase that could encompass immigration, trade, and security issues, making it more expansive in scope.

Scope and Economic Impact:

• The Canadian order allows de minimis duty-free treatment for a wider range of articles (subsections (a) and (b)), implying that a broader set of goods from Canada may continue to receive temporary exemptions.

"Duty-free de minimis treatment under 19 U.S.C. 1321 is available for otherwise eligible covered articles described in subsection (a) and subsection (b) of this section [Executive Order 14193]"

• The Mexican order restricts duty-free eligibility to only subsection (a) articles, possibly signaling a stricter stance on certain imports from Mexico.

 " Duty-free de minimis treatment under 19 U.S.C. 1321 is available for otherwise eligible covered articles described in subsection (a) of this section [Executive Order 14194] "

3. Diplomatic and Trade Relations:

• The measured language in the Canadian order suggests a less adversarial approach, aligning with historically strong U.S.-Canada trade relations.

• The broader and more restrictive language in the Mexican order may indicate harsher economic policies, reflecting long-standing tensions over trade, immigration, and border security.

Amendment to Duties to Address the Situation at our Southern Border

Amendment to Duties to Address the Flow of Illicit Drugs across our Northern Border