The coalition of labour unions, business associations, and stakeholders, including the National Council of Textile Organizations (NCTO), Alliance for American Manufacturing and American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) seeks to draw attention to the de minimis provision in Section 321 of the Tariff Act of 1930, which exempts shipments valued at less than $800 from import tariffs.
NCTO’s president and CEO Kim Glas pointed out that de minimis is not just a textile issue and she’s keen to urge others in Congress and the Administration to support the effort and immediately close de minimis.
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The coalition, which is led by Rep. Earl Blumenauer has demanded “swift and commonsense reform”, whether through legislation or executive action, to address the so-called dangers posed by the de minimis loophole and to safeguard US interests.
Blumenauer is a ranking member of the House Ways and Means Trade Subcommittee and has been leading the effort on Capitol Hill to reform the de minimis loophole in US trade law.
He said: “It is past time for Congress to act. We will not take ‘no’ for an answer.”
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One of the main goals of the coalition is to raise awareness and provide education on the detrimental effects of de minimis.
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By GlobalDataThe coalition claimed the loophole is being exploited by China and other foreign entities to allow goods produced through forced labour as well as counterfeit and harmful consumer products into the US market.
Blumenauer introduced bipartisan legislation in June 2023 known as the Import Security and Fairness Act to block non-market economies from exploiting the de minimis threshold and enable US Customs and Border Protection (CBP) to collect more information on de minimis shipments to better understand the scope of de minimis abuse and inform other necessary reforms.
The coalition suggested that in 2023 the de minimis rule allowed nearly 3m packages a day (rising to 1bn a year) to enter the US largely uninspected and duty free with 60% alleged to originate from China.
Coalition for a Prosperous America CEO Michael Stumo explained: “Both Congress and President Biden have the power to close this loophole, save an estimated 20,000 lives per year and protect US workers and businesses who obey our laws. CPA supports Congressman Blumenauer’s legislation that would exclude China from de minimis as a major step to rising the problem.”
The Alliance for American Manufacturing (AAM) and Rethink Trade alleged the de minimis provision advantages foreign companies over US manufacturers, which it said could lead to unfair competition and potentially the exploitation of workers.
AAM president Scott Paul claimed: “These Chinese companies have built billion-dollar businesses by exploiting de minimis, hooking American consumers on below-bargain-basement prices and supercharging a retail race to the bottom.
He continued: “There’s a very real cost hidden behind these cheap wares, and it’s paid by the men and women on the factory floor both here and abroad. The de minimis provision invites importers to cheat the system and exploit their workers. The United States must close this loophole now.”
Coalition co-sponsor Rep. Neal Dunn said: “Our current de minimis tariff incentivises the ‘gaming’ of American laws. Right now, China’s playing a shell game with their exports to the US by laundering them through Mexico, thereby dodging all duties. We must stop this! I look forward to working with this coalition to ensure that we protect Americans and American businesses.”
