House Dem Criticizes de Minimis China Carve-Out and Reversal as Chaotic
Rep. Rosa DeLauro, D-Conn., one of the leading voices in the House to end de minimis for e-commerce, said she wants President Donald Trump to remove all e-commerce from de minimis, so that it goes back to its original purpose of covering tourists' purchases. Given international direct-to-consumer shipping, "It’s become a vast gap in our customs regime," she said, causing a "flood of impossibly low-priced products that put American manufacturers out of business," and making it "almost impossible to enforce the ban on goods made with forced labor."
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DeLauro held a telephone press conference on the issue Feb. 12, joined by National Council of Textile Organizations CEO Kim Glas and Voices of Awareness leader Andrea Thomas.
"I am frustrated by the Trump’s recent half-measures and reversals on de minimis," DeLauro said.
She noted that the ban on Chinese products in de minimis began Feb. 4, said that Trump met with the chairman of the board of FedEx on Feb. 6, and on Feb. 7, the White House said the de minimis ban was paused until the Commerce Department said the government was ready to collect duties. (While the pause was published on Feb. 7, it was dated Feb. 5).
She said "rushed announcements [and] hasty rollbacks" were indicative of a chaotic policymaking approach.
DeLauro said advocates for ending de minimis don't know how long it will take CBP to be able to handle the millions of daily packages to collect revenue and analyze if the information submitted raises suspicions that the contents do not match, but that if they had been consulted, then the transition period could have been communicated, giving predictability to businesses.
"I hope it’s not several years," she said, but there may need to be additional warehouses rented by CBP at ports of entry, and additional personnel hired.
"This is not the next day," she said. "Eight months? Ten months? I just want to see what makes sense in getting to the goal of shutting it down. Clearly, in terms of the Trump administration, it doesn’t seem like any of these things are thought out."
Glas said, "We are trying to ascertain how long this pause will take," and she also questioned the wisdom of putting the de minimis carve-out for Chinese goods in the executive order increasing tariffs on Chinese goods by 10 percentage points. If that tariff was later rolled back, then the de minimis limitation would be too, she said. Also, she said that she doesn't believe CBP could effectively enforce a ban on Chinese goods if the packages entered the U.S. from China or Mexico. (Mexico has curtailed its role as a warehouse platform for de minimis by hiking tariffs on Chinese apparel and by changing the rules of its equivalent of foreign-trade zones, see 2412240009). Glas also said some prominent e-commerce companies were asking Vietnamese factories to ramp up. (Reports say that Temu is instructing its sellers to ship in bulk to the U.S. and use warehouses there for fulfillment.)
In response to a follow up question, an NCTO spokeswoman said the group has not been able to learn anything about how long it will take to implement the restriction.
The most far-reaching bills in Congress introduced to curtail de minimis have been to exclude China or, from Sen. Ron Wyden, D-Ore., to exclude Section 301 goods and all apparel goods and other "sensitive" goods as described in the Generalized System of Preferences benefits program.
Those approaches, as well as only removing Section 301 goods from eligibility, have bipartisan support.
Glas said the EU found that trying to limit de minimis piecemeal didn't work, and that she doesn't think excluding China will work either.
The speakers were asked if they would accept informal entry as the new method of importing, or only formal entries. The executive order had specified that international mail would require a formal entry.
Glas complained that international mail is a tiny fraction of de minimis shipments, and said, "in the informal entry requirement, it doesn’t require you to submit an [Harmonized Tariff Schedule] HTS code of what is the duty to enter that package, and who is the importer of record. For my industry, we have tariffs that range all the way up to 32%. If someone doesn’t supply their HTS code … we may not be collecting the revenue."
That is wrong. While de minimis entries can be a form of informal entry, informal entry includes dutiable packages with values from $800.01 to $2,500, and those entries require the same data elements as a formal entry -- including the HTS code. Informal entries do have lower merchandise processing fees than formal entries, and different bonding requirements.