2 Senators urge US govt to close 'de minimis' trade loophole

Packages under $800 in value are exempted from US duties, taxes and fees, and are now allowed to enter the country with little or no inspections.

The number of packages using this loophole to avoid duties has soared recently to more than three million packages per day, and urgent action is needed to prevent unfair competition and exploitation of US manufacturers, the Senators wrote in a letter to President Joe Biden.

Foreign competitors often split large shipments into many small packages to cheat the rules and evade duties, gaining an unfair competitive advantage.

These shipments often include counterfeit items and items made with slave labour, a press release from Senator Brown’s office said.

“[T]he Chinese Communist Party (CCP)—one of the worst trade and human rights abusers—directly benefits from duty-free access to the US market for shipments valued under $800. This generous gift comes with no rule of origin requirements, reciprocal market access, or labor or environmental standards. Simply put, the CCP and others utilizing de minimis can get rich while getting away with a host of trade infractions that undermine US manufacturing, harm American workers and expedite the flow of fentanyl and other harmful goods into our communities,” the senators wrote.

“The situation has reached a tipping point where vast sections of American manufacturing and retail are at stake if de minimis is not immediately addressed—including a large portion of US textile production and employment,” the senators continued.

Last September, Brown had called on President Biden to shield the US textile and apparel industry from unfair trade practices. Before that in June, he introduced the bipartisan Import Security and Fairness Act, a legislative solution to close the de minimis loophole.

Fibre2Fashion News Desk (DS)