Ambassador Lighthizer Says Lower de Minimis for Imports may Lower

On June 17, 2020, the U.S. Trade Representative, in testimony before the House Ways and Means Committee, said "The Administration will also look for ways to strengthen our existing trade policies to better protect American producers and consumers. One option is to tighten de minimis thresholds for American imports, including those subject to Section 301 tariffs. At $800, the U.S. de minimis threshold far exceeds that of our major trade partners. For example, the EU threshold is only $150, while China’s stands at a mere $7. This results in massive numbers of shipments to the U.S. receiving duty-free treatment and virtually no screening. In FY2018 and FY2019, there were a combined 1.2 billion de minimis shipments, with 719 million (or roughly 60 percent) coming from China. In contrast, the U.S. received only 68 million formal entries during this period, with only 7.3 million (or less than 11 percent) coming from China. The disproportionately high volume of these shipments indicates China and others are likely exploiting the high U.S. de minimis threshold to avoid paying duties."

Section 321(a)(2)(C) of the Tariff Act of 1930, as amended, authorizes CBP to provide an administrative exemption to admit free from duty and tax shipments of merchandise imported by one person on one day having an aggregate fair retail value in the country of shipment of not more than $800.

The Section 321 de minimis provision has attracted interest of late. On February 24, 2016, the Trade Enforcement and Trade Facilitation Act of 2015, Pub. L. 114-125, 130 Stat. 122 ("TFTEA"), was signed into law, which increased the de-minimis value exemption under 19 U.S.C. § 1321 from $200 to $800. Accordingly, beginning March 10, 2016, articles valued at $800 or less, which are imported by one person on one day, are eligible for duty free entry, under 19 U.S.C. § 1321(a)(2)(C). With the rise of the de minimis to $800 we have seen more online retailers taking advantage of it. For example, Sears used a warehouse in Canada for de minimis shipments of apparel direct to consumers in the U.S.