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DHS Secretary Says Congress Should Restrict de Minimis

Homeland Security Secretary Alejandro Mayorkas called for a "legislative fix" to the de minimis exception "and the exploitation of that exception," the first time the administration has clearly said it hopes Congress will restrict the program that allows purchasers to import up to $800 worth of goods per day without paying tariffs.

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In May, Acting CBP Commissioner Troy Miller said that legislative proposals could bring the number of shipments "down to a manageable level for us," (see 2404300040), but only in response to questions on de minimis.

Mayorkas, in contrast, said near the beginning of his remarks at the Center for Strategic and International Studies July 9 that the department "is working towards and hoping to receive a legislative fix to give us greater authorities to address" the challenge that de minimis presents to forced labor enforcement.

Mayorkas, who was speaking on UFLPA at the CSIS event, said that he didn't have the capacity to curtail de minimis without legislative action, but said, "we are working without our powers to enhance our regulatory authorities."

In June, CBP said the proposed rulemaking language was at the Office of Management and Budget (see 2406210053) -- that proposed rule first began to be drafted two years ago (see 2207190012).

The comments are a change from CBP legislative liaison conversations in the House seven months ago, when CBP focused on its 21st Century Customs Framework plans, such as collecting data from new sources, sharing data on intellectual property violations more widely, and reducing bureaucracy when throwing out detained packages. At that time, CBP opposed a proposal by Rep. Earl Blumenauer, D-Ore., to remove Chinese goods from de minimis eligibility, according to a member who was in the meeting.

Mayorkas didn't say if he supports the bill that moved out of the House Ways and Means Committee, which would restrict de minimis eligibility for goods subject to Section 301 duties, and would require that all de minimis packages include a 10-digit Harmonized Tariff Schedule code. Currently, about 60% of packages have full HTS classifications.

House Speaker Mike Johnson, R-La, said this week that he intends to bring a bill up for a vote this year that includes that provision (see 2407080049).

Mayorkas also suggested that the very concept of de minimis -- that these imports are insignificant to the government -- is flawed.

"De minimis is built on a false premise, that low value means low risk," he said. He said if the audience could stand beside CBP inspectors and see what the agency discovers -- narcotics, ghost guns, "all sorts of contraband" -- they would be stunned.

Although most of the tenor of the speech was about the scourge of forced labor, and the administration's determination to root it out, Mayorkas expressed sympathy for the difficulties companies have in tracing their goods back to raw materials.

"We understand the difficulty in identifying a global supply chain," he said. "We understand how difficult it is to move a supply chain."

Mayorkas said that the administration gave "advance warnings" to solar panel importers that their panels contained polysilicon that is forbidden from entering the U.S. "We've seen some companies heed our warnings. We've seen other companies, frankly, not heed them in a timely fashion. We take a tough stance on that."

Mayorkas praised solar panel companies that shifted their supply chains, and said as a result, production of polysilicon in India and North America will triple by 2026. He said that he, CBP Executive Assistant Commissioner AnnMarie Highsmith and Eric Choy, who leads the forced labor directorate, "work very, very closely with the solar industry."

He also talked about close collaboration with domestic textile interests, whom he said taught him "quite a bit about how much the textile industry is suffering by reason of this scourge," and said that the textile "enforcement strategy was developed in concert with industry."

The main reason to fight forced labor is a humanitarian one, Mayorkas argued, but he also said: "There are collateral benefits to this work, for example, ensuring that the marketplace is a fair one -- that companies that pay substandard wages, that exploit the workers and advantage themselves by being able to reduce their cost" are not allowed to undercut domestic workers.

One of the attendees asked about the presence of forced labor in fast fashion. Mayorkas said he wasn't really familiar with the term, but understood it refers to clothes that are seen as disposable. "There are a number of concerns that have been raised with that. Not just a risk of forced labor, but also there are environmental concerns, and the like."

Mayorkas said he didn't want to say too much, but hinted action could be coming. "We are well aware of those concerns, and we tend not to drive by concerns, but actually address them."