Senators Urge Executive Action on De Minimis Shipments

Feb. 29, 2024
By: Pietro N. Bianchi

Regular readers will know that the status and use of de minimis entries into the United States has become an area of major concern. You can read about it here, here, and here for starters. In a nutshell, de minimis allows low value shipments (currently less than $800 per day) to enter the United States free of duties and other taxes or exactions (think Section 301, among others). However, there is also evidence that de minimis entries are being used to facilitate imports of illegal and/or inadmissible goods into the United States.

Congressional action to address these de minimis concerns would be the most direct means to change the system. However, de minimis, the Generalized System of Preference renewal, and a host of other trade-related matters are stuck in the general inability of the current Congress to advance even popular legislation. This has created a sense of urgency among at least some members of Congress to get de minimis changed (if not to advance legislation).

Senators Sherrod Brown (D-OH) and Rick Scott (R-FL) wrote a letter to the Biden Administration on February 23, 2024 urging the President to take executive action to eliminate the de minimis exemption on imports. Senator Brown explains on his website that this exemption is used as a loophole “facilitating the import of illegal products, goods produced with forced labor, and other contraband to the detriment of U.S. manufacturers, workers, and communities.”

It is not yet clear whether the Biden Administration will attempt to use executive action to modify the de minimis rule. 19 USC 1321(a)(2)(C) merely authorizes Customs to create an $800 de minimis exception, while 19 USC 1321(b) makes clear that the exemption may be modified to protect the revenue or prevent illegal imports. However, because that authority was exercised under 19 CFR 10.151, any modification would likely necessitate a change in the regulations using the notice-and-comment procedure, which would take, at minimum, several months. With an election in November, it may be quicker to simply wait for a new, more functional Congress (or not).

The Senate’s concerns over de minimis are unlikely go away, with trade becoming a more instrumental part of foreign affairs. However, what action is taken and who it impacts remain open questions. If you have questions about de minimis shipments or foreign trade policies do not hesitate to contact an attorney at Barnes Richardson, & Colburn LLP.