The "de minimis" entry process has allowed goods under $800 to bypass tariffs and undergo a simplified entry procedure. However, the increase in such shipments has overwhelmed Customs and Border Protection's ability to screen out packages containing illegal substances like fentanyl precursors, counterfeit items, forced labour products, and other contraband.
“This legislation closes a loophole in order to protect Americans from fentanyl and other illicit drugs that are flowing into our country. It also safeguards South Carolina manufacturers, ensuring they can remain competitive in the global market. I’m glad to work with my colleagues on this important effort,” Senator Lindsey Graham stated.
Senator Sheldon Whitehouse added: “Given the explosion of e-commerce and increasingly complex global supply chains, we need to modernise our customs laws to better stop cartels and international criminals from slipping deadly fentanyl into our communities. Closing the de minimis loophole will also protect Rhode Island workers and manufacturers, while punishing shady foreign companies for skirting our trade laws to undercut domestic companies.”
Key provisions of the Closing the De Minimis Loophole Act
- An immediate cessation of de minimis privileges for packages originating from China, with a gradual phase-out of de minimis for all other countries over four months
- A mandate for the Treasury Secretary to manage a rulemaking process during the transition period to ensure that Customs and Border Protection is equipped with the necessary tools and procedures for an effective termination of de minimis across all countries
- A directive for the Treasury Secretary to collaborate with the Postmaster General in establishing suitable fees and entry procedures that strive for uniformity between postal and other forms of shipments when possible.
Prior to introducing in the Senate, the legislation was introduced in the House of Representatives by Congresswoman Linda Sánchez (D-CA), and has garnered support from various organisations including the National Council of Textile Organizations (NCTO), United Steelworkers (USW), National Association of Police Organizations, Facing Fentanyl, Rhode Island Textile Innovation Network, and Alliance for American Manufacturing.
The textile industry in the US employs approximately 471,000 individuals and generates an annual output nearing $64bn.
National Council of Textile Organizations (NCTO) president and CEO Kim Glas said: “We commend Senators Sheldon Whitehouse and Lindsey Graham for their leadership and support of this important bipartisan legislation that would codify and permanently end de minimis treatment for China immediately, while phasing out de minimis for all other countries after a four-month transition period.
“This bill, a companion to legislation in the House, is the strongest and most comprehensive legislative solution to closing the destructive de minimis loophole once and for all.”
Glas added: “The legislation will help level the playing field for the domestic textile industry, which has lost 28 textile plants over the past 22 months. We strongly support this legislation and look forward to working with Senators Whitehouse and Graham to advance it.”
Earlier this month, US President Donald Trump issued an executive order reducing the de minimis threshold for low-value shipments from China, potentially dropping it by as much as 30%.
