US lawmakers urge Biden to close tariff 'loophole' for low-value packages

12/9/2024 5:52

        A majority of Democratic
        U.S. House of Representatives members on Wednesday urged
        President Joe Biden to use his executive powers to end a tariff
        "loophole" for low-value packages that they say are being
        exploited by Chinese e-commerce firms and fentanyl traffickers.
        
        The lawmakers in a letter asked Biden to end the "de
        minimis" trade provision that allows shipments valued under $800
        to enter the U.S. duty free and without customs inspections as
        long as they are addressed to individuals.
        
        The substantial limit has fueled the growth of Chinese
        e-commerce firms Shein and PDD Holdings' Temu, which ship to
        U.S. consumers directly from China, but other retailers,
        including Amazon and Walmart, are also utilizing it. The
        small-package exemption has been part of U.S. trade law since
        1930, but the threshold was increased to $800 from $200 in 2015.
        
        The lawmakers, led by Earl Blumenauer, Rosa DeLauro and Tom
        Suozzi, argued that the de minimis provision was being exploited
        by traffickers of the deadly opioid fentanyl and its precursor
        chemicals.
        
        "The urgency of closing the de minimis loophole cannot be
        overstated. Americans continue to die from mislabeled
        fentanyl-laced pills that are ordered online, skirt inspection
        thanks to de minimis and are delivered to Americans’ doorsteps,"
        they wrote. "De minimis imports, particularly from China, also
        evade most existing trade enforcement mechanisms, including the
        Uyghur Forced Labor Prevention Act and Section 301 tariffs used
        to hold trade cheats accountable."
        
        The National Council of Textile Organizations, representing
        domestic manufacturers, argues that de minimis shipments from
        fast-fashion e-commerce firms including Shein are dodging the
        punitive "Section 301" tariffs on many Chinese textile imports
        and have led some 18 U.S. plants to close in the last year
        alone.
        
        The group said shipments keep growing, with over 4 million
        individual packages arriving under the threshold daily, topping
        1 billion last year.
        
        The total value of estimated imports of low-value shipments
        under the de minimis threshold has more than doubled since 2014
        to $23.4 billion last year, making it the 12th largest U.S.
        import category globally, according to U.S. Census Bureau data
        retrieved through the International Trade Centre's Trademap
        tool. That is just ahead of medium-duty pickup trucks, largely
        from Mexico.
        
        Such shipments from China also more than doubled to $4.6
        billion over the same period, making it the eighth largest
        category after computer monitors.
        
        A White House spokesperson could not immediately be reached
        for comment on the request by the lawmakers, who also have been
        working on legislation to close the de minimis provision.
        
        The National Foreign Trade Council, a trade group
        representing interests of a wide range of U.S. companies,
        cautioned the move would raise costs for consumers at time when
        inflation is a hot issue in the November presidential election
        campaign.
        
        "Weakening de minimis would cost consumers billions, require
        new appropriations for Customs and Border Protection, and do
        nothing to enhance enforcement or improve security at our
        ports," NFTC supply chain senior director John Pickel said in a
        statement.