A loophole in U.S. trade law is increasingly coming under the microscope, as companies in the retail segment exploit the technicality to sidestep import costs and attention from Customs. On Wednesday, Representatives Rosa DeLauro (CT-03), Earl Blumenauer (OR-03), and Tom Suozzi (NY-03) released a letter signed by 126 House Democrats calling on President Biden to “use executive authority to end the dangerous de minimis [loophole]” and urging the administration to “update the de minimis policy, which undercuts American workers, manufacturers, and retailers and threatens our health and safety.”
> The De Minimis Loophole: Setting the stage in the September 11 letter, Reps. Blumenauer, DeLauro, and Suozzi state that “under regulations issued in 1994, before the rise of mass direct-to-consumer e-commerce, de minimis now enables four million packages daily of imports – mainly from China – ordered online to enter the U.S. without inspection for dangerous materials, and to evade taxes and tariffs, including most trade-cheating penalties and the ban on forced-labor goods.” In addition to being “exploited by drug cartels and criminals to facilitate the importation of deadly substances like fentanyl,” the de minimis loophole has allowed retail giants to build massive businesses (complete with hefty margins) in the U.S.
In fact, the representatives state in a corresponding release that “over 4 million de minimis packages are now entering the U.S. every day with virtually no scrutiny or inspection – half are estimated to be textile and apparel products.”
