FACT SHEET: Biden-Harris Administration Announces New Actions to Protect American Consumers, Workers, and Businesses by Cracking Down on De Minimis Shipments with Unsafe, Unfairly Traded Products
Administration Also Urges Congressional Action on De Minimis Reform
Today, the Biden-Harris Administration is taking new actions to enforce our laws and protect American consumers, workers, and businesses by addressing the significant increased abuse of the de minimis exemption, in particular China-founded e-commerce platforms, and strengthening efforts to target and block shipments that violate U.S. laws.
Over the last ten years, the number of shipments entering the United States claiming the de minimis exemption has increased significantly, from approximately 140 million a year to over one billion a year. This exponential increase in de minimis shipments makes it more challenging to enforce U.S. trade laws, health and safety requirements, intellectual property rights, consumer protection rules, and to block illicit synthetic drugs such as fentanyl and synthetic drug raw materials and machinery from entering the country.
The majority of shipments entering the United States claiming the de minimis exemption originate from several China-founded e-commerce platforms, putting American consumers at risk, undercutting American workers and businesses, and resulting in the importation of huge volumes of low-value products such as textiles and apparel into the U.S. market duty-free. A shipment is eligible for the de minimis exemption if the aggregate fair retail value of the articles imported is $800 or less. De minimis shipments enter the United States with less information than other imports and are not subject to duties and taxes.
The growing volume of de minimis shipments makes it increasingly difficult to target and block illegal or unsafe shipments. Foreign corporate giants who exploit the de minimis exemption do so for a variety of reasons. Some companies exploit the de minimis to conceal shipments of illegal and dangerous products and avoid compliance with U.S. health and safety and consumer protection laws. Other foreign entities use it to circumvent U.S. trade enforcement actions intended to level the playing field for American workers, retailers, and manufacturers.
With today’s announcement, the Administration is using executive authority to stop the abuse of the de minimis exemption. The Administration also calls on Congress to pass legislation this year to reform the de minimis exemption comprehensively to further protect American consumers, workers, and businesses.
Administration Action Intended to Reduce De Minimis Import Volumes
New Rulemaking to Reduce De Minimis Volume and Strengthen Trade Enforcement: The Administration intends to issue a Notice of Proposed Rulemaking that would exclude from the de minimis exemption all shipments containing products covered by tariffs imposed under Sections 201 or 301 of the Trade Act of 1974, or Section 232 of the Trade Expansion Act of 1962.
- Section 301 tariffs currently cover approximately 40% of U.S. imports, including 70% of textile and apparel imports from China. Some e-commerce platforms and other foreign sellers circumvent these tariffs by shipping items from China to the United States claiming the de minimis exemption. If finalized, these goods would no longer be eligible for the de minimis exemption.
- It would also ensure that de minimis exemption eligibility for products covered by trade enforcement actions is consistent across U.S. trade laws. Products covered by antidumping or countervailing duty orders are already excluded from de minimis exemption eligibility.
Administration Action to Protect U.S. Consumers, Workers, and Businesses
New Rulemaking to Improve Accountability and Enforcement in De Minimis Shipments: The Administration intends to issue a Notice of Proposed Rulemaking regarding the entry of low-value shipments that will propose to strengthen information collection requirements to promote greater visibility into de minimis shipments.
- This regulatory action will propose to require specific, additional data for de minimis shipments – including the 10-digit tariff classification number and the person claiming the de minimis exemption – which will improve targeting of de minimis shipments and facilitate expedited clearance of lawful de minimis shipments.
- The proposed regulatory changes will also clarify who is eligible for the administrative exemption, and requires filers to identify the person on whose behalf the exemption is being claimed.
- These new requirements would help U.S. Customs and Border Protection (CBP) protect consumers from goods that do not meet regulatory health and safety standards and protect U.S. businesses from unfair competition against imported goods that would otherwise be charged duties or restricted from entry.
Final Rule to Prevent De Minimis Shipments from Circumventing Safety Standards: Consumer Product Safety Commission (CPSC) staff intend to propose a final rule requiring importers of consumer products to file Certificates of Compliance (CoC) electronically with CBP and CPSC at the time of entry, including for de minimis shipments.
- This regulation would strengthen CBP’s and CPSC’s ability to target and block unsafe products from entering the U.S. market and would help prevent foreign companies from using the de minimis exemption to circumvent consumer protection testing and certification requirements.
Comprehensive Legislative Reforms on De Minimis Needed to Protect American Consumers, Workers, and Businesses
The Administration is pursuing significant regulatory action to address the surge in de minimis imports that put American consumers, workers, retailers, and manufacturers at risk. But further comprehensive de minimis reforms are needed, and these reforms require congressional action. The Administration stands ready to work with Congress to pass comprehensive de minimis reform legislation by the end of the year. Key reforms Congress should advance include:
- Exclusion from de minimis eligibility of import-sensitive products. Congress should act to exclude import-sensitive products, including textile and apparel products, from the de minimis exemption.
- Exclusion from the de minimis exemption of shipments containing products that are covered by Section 301, Section 201, or Section 232 trade enforcement actions. The Administration intends to issue a Notice of Proposed Rulemaking to exclude shipments containing products covered by Section 301, Section 201, or Section 232 trade remedies actions, but legislative action by Congress to make this statutory change would help to achieve this important reform more quickly.
- Passage of previously proposed de minimis reforms in the Detect and Defeat Counter-Fentanyl Proposal. These reforms would, among other actions, increase transparency and accountability under the de minimis program by requiring more data from shippers, including the product tariff classification number, and give border officials tools they need to more effectively track and target the millions of shipments coming in claiming the de minimis exemption. The Detect and Defeat Counter-Fentanyl proposal incorporates many of the bipartisan ideas put forward by Members of Congress, and will increase CBP’s ability to detect and seize illicit drugs and the raw material used to make them, and hold drug traffickers accountable.
Administration Action to Protect American Textile and Apparel Manufacturers
American textile and apparel producers play a critical role in the U.S. defense industrial base and support hundreds of thousands of direct and indirect jobs in the United States. U.S. textile and apparel manufacturers are facing unfair competition from several China-founded e-commerce giants, as these companies take advantage of the de minimis exemption to ship huge volumes of textile and apparel products to American consumers. In addition to the de minimis reforms highlighted above, the Administration is exploring other decisive actions to support U.S. textile and apparel manufacturers and their workers.
- Executive Branch Action to Expand Procurement of Certain Textile and Apparel Products: The Administration will explore ways to increase procurement of certain textile and apparel products across agencies, as a way of ensuring that U.S. taxpayer dollars are supporting U.S. taxpayer jobs in the textile and apparel sector.
- Strengthened Textile and Apparel Enforcement:The Administration continues to prioritize enforcement efforts against illicit textile and apparel imports through intensified targeting of small package shipments, joint trade special operations, increased customs audits and foreign verifications, and the expansion of the Uyghur Forced Labor Prevention Act (UFLPA) Entity List.
Joseph R. Biden, FACT SHEET: Biden-Harris Administration Announces New Actions to Protect American Consumers, Workers, and Businesses by Cracking Down on De Minimis Shipments with Unsafe, Unfairly Traded Products Online by Gerhard Peters and John T. Woolley, The American Presidency Project https://www.presidency.ucsb.edu/node/374183