U.S. Customs and Border Protection (CBP) has proposed new rules to restrict de minimis treatment for low-cost imports subject to certain tariffs. The proposed changes would remove the exemption that currently allows goods valued under $800, covered by Section 201, 232, and 301 tariffs, to avoid import duties. This move aligns with priorities outlined by the Biden-Harris administration.
Under the proposal, shipments claiming the de minimis exemption would be required to provide tariff classification numbers through both the basic and enhanced entry processes. This measure is intended to allow CBP to determine whether the merchandise qualifies for the exemption. The proposal highlights national security, protection of domestic industries, and the addressing of discriminatory or restrictive practices as key goals. It also underscores the vulnerability of the domestic textile and manufacturing industries to imports, particularly from China, that use the exemption.
The proposed changes would impact numerous imports that currently utilize the de minimis exemption to bypass duties. CBP estimates that 77% of shipments claiming the exemption in fiscal year 2023 would have been subject to additional duties under Section 201, 232, or 301 tariffs without the exemption.
The proposal also notes that standard duty rates for most imported goods are below 2%, while tariffs under Section 301, which apply to certain goods from China, range from 7.5% to 100%. CBP projects that consumers will bear the cost of higher tariffs resulting from the rule change, potentially leading to increased prices for imported goods. The elimination of the de minimis exemption for goods subject to these tariffs could encourage importers to consolidate orders into larger shipments, reducing the need to meet the $800 threshold. This shift could streamline CBP’s inspection process, as officers would be able to review multiple identical items at once.
The public has until March 24 to comment on the proposed rule. This is the second of two rule change proposals tied to the administration’s broader plan, announced in September, to prevent abuse of the de minimis exemption. A separate proposal, introduced last week, focuses on enhancing data collection requirements for low-cost imports entering the U.S.
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