WASHINGTON – Labor unions, domestic manufacturers, business associations and other advocacy organizations announced a bipartisan coalition Wednesday to close an import loophole that is allowing billions of untaxed goods into the United States
“The coalition we have assembled is evidence of the growing pressure to close the de minimis gap,” said Rep. Earl Blumenauer, D-Ore. The ranking member of the House Commerce Subcommittee is working with the new coalition to close the de minimis loophole.
The group will draw attention to a so-called “de minimis” provision in Section 321 of the Customs Act of 1930, which waives import duties on shipments with a fair sale value of less than $800.
“De minimis not only poses a threat to American businesses and consumers, as if that weren’t enough, but it is increasingly contributing to the fentanyl crisis that is ravaging our communities,” Blumenauer added. “It is past time for Congress to act. We won’t take no for an answer.”
The announcement comes just days after Rep. Mike Gallagher, R-Wisc., chairman of the House Special Committee on the Chinese Communist Party, released a statement denouncing a surge in de minimis imports in fiscal year 23-24 , according to data obtained from US Customs and Border Protection.
“According to CBP, more than 485 million de minimis shipments have already entered the United States in FY24, in addition to the 1.05 billion shipments that were introduced tax-free under de minimis rules in 2023, which in turn represents a represents a shocking 53% increase over 2022,” said Gallagher.
“As many as 94% of all import transactions now enter the United States through de minimis rules, accounting for 90% of all illegal customs seizures of drugs, agricultural goods and counterfeit goods,” he added.
According to a report last amended on March 1, CBP said it processed over 1 billion de minimis shipments in FY23. The agency did not respond to a request from CNBC for comment on the FY24 data.
The coalition supports bipartisan legislation led by Blumenauer and co-sponsored by Rep. Neal Dunn, R-Florida, a member of the House CCP Committee; and Sens. Sherrod Brown, D-Ohio, and Marco Rubio, R-Fla., to prevent non-market economies – countries that misrepresent the fair value of their goods – from exploiting the loophole and to require CBP to provide more data on the Collect supplies.
The bill was referred to the House Ways and Means Committee in June.
“Whenever we have a situation where we have imports that don’t pay tariffs, don’t pay tariffs, and by the way, they often come from countries that subsidize that production, that’s a huge advantage, an unfair advantage over American production and this has to stop,” Dunn told reporters during a news conference Wednesday.
Representatives: Dan Bishop, R-N.C., and Rosa DeLauro, D-Conn. also work with the coalition.
A June House CPC Committee report found that Singapore-based online retailer Shein and Temu, owned by Chinese parent company PDD Holdings, was involved in over 30% of de minimis imports, which are shipped daily to the USA. Shein filed for an initial public offering in the U.S. in November. potentially expanding its reach to the Western market.
According to a November report, the company was valued at over $66 billion, while PDD this month reported third-quarter revenue of $9.44 billion.
Meanwhile, domestic competitors are having comparative problems with current import laws, according to Kim Glas, president and CEO of the National Council of Textile Organizations.
“Our industry has lost, astonishingly, ten plants in five months due to the de minimis rule,” Glas told reporters. “De minimis is not just a textile problem, de minimis is an out-of-control wildfire that is killing our manufacturing sector and jobs, destroying local communities, and facilitating the importation of illegal, illicit and dangerous products into the United States.”
The coalition’s other 24 members include the AFL-CIO, the Alliance for American Manufacturing and the Coalition for a Prosperous America.
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2024-03-07 04:10:00
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