U.S. Trade Action Nets One Big Change

Feb. 4, 2025
By: David G. Forgue

On February 1, 2025 President Trump announced that tariffs of either 25% or 10% would be imposed on imports of Canadian, Mexican, and Chinese goods starting February 4. However, by the close of business on February 3 both Mexico and Canada had reached agreements with the United States that postponed the duties for at least 30 days. This led many in the trade community to conclude that the “only” meaningful result of the announcements was an additional imposition of 10% on goods from China.

While large importers may be impacted only by the 10% increase in China tariffs, many consumers and small importers will be impacted by part of the China announcement they may not have noticed. In specific, the de minimis exemption found in 19 U.S.C. 1321, which allows many low value imports into the United States without Customs formalities (or review) has been taken away for any shipments of goods subject to the new Chinese duties. Very close to all imported Chinese goods in the tariff are subject to the new duties, which effectively bars imports of Chinese goods from the de minimis exemption.

The rise of the direct-shipment e-commerce platforms has caused an explosion of de minimis shipments into the United States. This benefited consumers, who received goods more quickly and cheaply than they would have had the goods gone through formal Customs entry processes. However, the explosion in de minimis volume also allowed shipments of narcotics, counterfeit goods, unsafe products, and other articles normally barred from United States commerce. This issue has been percolating for quite a while.

With the imposition of Chinese duties and action to bar goods subject to the duties from de minimis treatment the Administration has mooted the pending rules and regulations on de minimis shipments from China. Imports will need to be formally entered, with the tariff information, value, and other required import information included. Duties will need to be tendered. Any e-commerce platform not currently prepared to act as importer of record will have important business decisions to make. Whatever decisions they make, it appears that the era of low-cost direct ship e-commerce is likely over in the United States.

If you have any questions about the import process, do not hesitate to contact any attorney at Barnes, Richardson & Colburn, LLP.