Business Groups Argue de Minimis Restriction Would Be Expensive

A coalition of business groups, including the U.S. Chamber of Commerce, the National Association of Manufacturers, the E-Merchants Trade Council, the National Foreign Trade Council and the Express Association of America, is pushing back against the de minimis legislation that was approved in the House Ways and Means Committee earlier this year, arguing that it would be "a massive cost to the federal government," shift trade to the mail, and create congestion at airports and a wave of abandoned packages.

In a two-page sheet, they said if the bill becomes law it will "create more enforcement challenges instead of solving them."

Customs would require tens of thousands of additional agents, import specialists, inspectors and lawyers to determine whether the items entering under de minimis are covered by Section 301, Section 232, safeguard, antidumping or countervailing duties, they said. "Making such determinations on a significant portion of over one billion low-value shipments would be impossible with CBP's current staffing levels," they wrote.

The groups argued that time spent classifying low-value shipments is an opportunity cost for CBP, and that they could be "inspecting packages that may pose a high risk."

The groups said: "When a product enters under de minimis but is found ineligible by CBP, the import will need to be converted to an informal or formal entry. This would require businesses to identify a person as an importer, hire a customs broker, and pay the duty before the shipment could be released. If a business does not follow through with these tasks, shipments would be left unclaimed or abandoned and CBP would have to dispose of the product, which is costly."

Under the bill, all packages would have to include a 10-digit tariff so that CBP could identify if they are eligible for de minimis. Tariff classification is considered customs business, and in any case requires use of a broker.

They predicted that more packages will shift to the mail, and said that avenue is not as well inspected by CBP, and that trying to collect duties on a package sent through the mail is a manual process. "CBP may have to request that consumers come to the port of entry to pay the required duties and pick up their package," the groups said.

Instead of this bill, the groups argue, Congress should focus on comprehensive customs modernization, which would provide higher quality data, which they say "will provide better enforcement outcomes across all entry types and shipping environments."