Bipartisan Bill Proposes Barring Chinese Goods From de Minimis, Separate Rates by Country
A recently introduced bill would end Chinese and Russian shippers' eligibility for de minimis, and would order the Treasury Department to determine, within 180 days, what rates the other countries deserve for de minimis, based on both their own de minimis treatment of U.S. shipments and their threshold to collect a value-added tax, if they have one.
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The bill, introduced June 14 by Sens. Bill Cassidy, R-La., J.D. Vance, R-Ohio, and Tammy Baldwin, D-Wis., also proposes that Treasury could bar other countries' exporters from using de minimis entry if goods from their country have violated the Uyghur Forced Labor Prevention Act; if they have had transshipment from countries ineligible for de minimis; if they have exported counterfeits; or if they are a Tier 3 country under the State Department's Trafficking in Persons report.
Currently, Tier 3 countries are: Cambodia, China, Malaysia, Nicaragua, Vietnam, Myanmar, Afghanistan, Belarus, Brunei, Cuba, Curacao, Eritrea, Guinea-Bissau, Iran, North Korea, Macau, Russia, Sint Maarten, South Sudan, Syria, Turkmenistan and Venezuela.
The Treasury Department would have one year to decide which countries, other than China and Russia, cannot ship under de minimis.
Cassidy has previously recommended reciprocal de minimis levels for each country as part of his Americas Act, with the additional revenues paying for infrastructure in developing countries in the Western Hemisphere that could be good candidates for nearshoring, or loans for companies that are moving production from China to the Western Hemisphere. This bill, too, reserves the additional revenue for reshoring from China.
The Congressional Budget Office estimated that changes to de minimis in the Americas Act (see 2301130042) to match other countries' thresholds would bring in $10 billion to $15 billion annually in tariffs.
In the press release announcing the bill's introduction, Baldwin said: “A trade loophole is allowing Chinese companies to import goods in the U.S. with no oversight -- letting them bring in cheap, counterfeit goods that undercut American manufacturers and traffic drugs into our communities. Our bipartisan bill will close this loophole to create a level playing field for our Made in America manufacturers, curb the illicit drugs like fentanyl from coming into the country, and help ensure Americans are not supporting goods made with forced labor.”