WASHINGTON — Labor unions, domestic manufacturers, business associations and other interest organizations announced Wednesday a bipartisan coalition to target an import loophole that allows billions in untaxed goods into the U.S. US
“The coalition we’ve built is a testament to the mounting pressure to close the de minimis loophole,” Rep. Earl Blumenauer, D-Ore., said. The ranking member of the House Ways and Means Subcommittee on Trade is working with the new Coalition to Close the De Minimis Loophole.
The group will call attention to a so-called “de minimis” provision of Section 321 of the Tariff Act of 1930, which eliminates import tariffs for shipments with a fair retail value of less than $800.
“De minimis is not only a threat to American businesses and consumers, as if that weren’t enough, but it is further contributing to the fentanyl crisis that is ravaging our communities,” Blumenauer added. “It is past time for Congress to act. We will not take ‘no’ for an answer.”
The announcement comes just days after Rep. Mike Gallagher, R-Wisc., chair of the House Select Committee on the Chinese Communist Party, issued a statement decried the increase in de minimis imports in FY ’23-’24, according to data received from US Customs and Border Protection.
“According to CBP, more than 485 million de minimis shipments entered the United States in FY ’24, in addition to 1.05 billion shipments entering tax-free under de minimis rules by 2023, itself a a staggering 53% increase from 2022. ,” Gallagher said.
“At least 94% of all import transactions now enter the US through de minimis rules, accounting for 90% of all illegal narcotics, agricultural products, and counterfeits customs seizure,” he added.
CBP said it processed more than 1 billion de minimis shipments in FY ’23, according to a report last modified March 1. The agency did not respond to a request for comment from CNBC on the FY ’24 data.
The coalition supports bipartisan legislation led by Blumenauer and cosponsored by Rep. Neal Dunn, R-Fla., a member of the House CCP Committee; and Sens. Sherrod Brown, D-Ohio and Marco Rubio, R-Fla., to stop non-market economies — countries that miscalculate the fair value of their goods — from exploiting the hole and require CBP to collect more data on shipments.
The fee is referred to the House Ways and Means Committee in June.
“Anytime we have a situation where we have imports that don’t pay tariffs, don’t pay any duties, and by the way, often come from countries that subsidize that production; it is a huge advantage, an unfair advantage, against American production and it must stop,” Dunn told reporters at a press conference Wednesday.
Rep. Dan Bishop, RN.C., and Rosa DeLauro, D-Conn. is also working with the coalition.
A June House CCP Committee report tied Singapore-based online retailer Shein at Temuowned by Chinese parent company PDD Holdings, in more than 30% of de minimis imports shipped daily to the US Shein filed in November to go public in the US, potentially expanding its reach into the Western market.
The company was valued at more than $66 billion according to a November report, while PDD reported third-quarter revenue of $9.44 billion that month.
Meanwhile, domestic competitors are struggling somewhat under current import laws, according to Kim Glas, president and CEO of the National Council of Textile Organizations.
“Our industry lost an incredible 10 plants in five months as a result of the de minimis loophole,” Glas told reporters. “De minimis is not just a textile issue, de minimis is a wildfire out of control, killing our manufacturing sector and jobs, destroying local communities and facilitating illegal, illicit and dangerous US product”
The other 24 coalition members include the AFL-CIO, the Alliance for American Manufacturing and the Coalition for a Prosperous America.
