US CBP proposes new rule to tighten de minimis duty exemption

The proposed changes would make certain products ineligible for the exemption, which currently allows goods valued at $800 or less to enter the country without paying duties or certain taxes, a practice unfair to American businesses.

The proposed Trade and National Security Actions for Low-Value Shipments regulation protects intellectual property rights, consumer health and safety protections, and closes enforcement gaps while safeguarding American businesses and workers from unfair trade practices, a CBP release said.

“The exemption of these goods from duties or taxes has undermined American businesses and workers and flooded our ports of entry with foreign-made products, making CBP’s vital work screening these goods for security risks more difficult. The actions announced today to tighten this exemption will strengthen America’s economic and national security,” secretary of homeland security Alejandro N Mayorkas said.

Over the last 10 years, the number of shipments entering the United States claiming the de minimis administrative exemption increased by more than 600 per cent from approximately 139 million a year in fiscal 2014-15 to over a billion a year by fiscal 2022-23.

During fiscal 2023-24, de minimis shipments rose once again to over 1.36 billion. This exponential increase has created challenges for CBP’s effective enforcement of US trade laws, health and safety requirements, intellectual property rights, and consumer protection rules, CBP noted.

Under the proposed new rule, merchandise subject to specific trade and national security actions would no longer qualify for the de minimis exemption; and certain shipments claiming this exemption will be required to provide the 10-digit harmonized tariff schedule of the United States (HTSUS) classification for the imported low-value merchandise.

The proposed regulation specifically focuses on national security tariffs imposed under Section 232 of the Trade Expansion Act of 1962, safeguard tariffs imposed under Section 201 of the Trade Act of 1974, and unfair trade tariffs imposed under Section 301 of the Trade Act of 1974.

It proposes to exclude merchandise subject to tariffs imposed under Section 232, Section 201 and Section 301 from eligibility for duty-free treatment under the de minimis exemption.

ALCHEMPro News Desk (DS)