The U.S. Congress should consider lowering the $800 de minimis threshold to better align with those of other countries, such as Canada’s $15 limit.
President Trump’s recent executive order imposing tariffs on China, Canada, and Mexico included the suspension of a trade loophole. Although the suspension primarily targets low-value imports, its implications are wider than many might realize.
At the heart of this issue is the de minimis provision, which originates from Section 321 of the Tariff Act of 1930. This provision was initially designed to prevent the government from incurring excessive costs and hassles for small imports made by individuals in a single day, as long as the fair retail value of those imports did not exceed $1. Over the years, Congress has raised this threshold multiple times, and it currently stands at $800, making it the most generous de minimis exemption in the world. In contrast, Canada’s de minimis exemption is capped at only $15.
In recent years, numerous foreign companies, particularly those in China, have capitalized on America’s overly generous de minimis threshold amid the e-commerce boom. This exploitation has led to a significant increase in both the volume and value of imports that are exempt from tariffs due to this provision.
A congressional report revealed that between fiscal year 2018 and 2021, more than two-thirds of de minimis imports came from China (including mainland and Hong Kong). In 2023 de minimis imports comprised an astonishing 1 billion parcels valued at approximately $54.5 billion, with around $18 billion in shipments originating from China. […]
— Read More: thefederalist.com
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