President Donald Trump’s flip-flopping on trade issues has proponents of de minimis reform up in arms.
At a virtual press conference on Wednesday, U.S. Representative Rosa DeLauro (D-Conn.) characterized the first weeks of the Trump presidency—which have included the levying and subsequent deferral of tariffs on Mexico and Canada, the imposition of new duties on China and a ban on de minimis that lasted less than 24 hours—as “classic Trump chaos.”
“I am frustrated by the Trump administration’s recent half-measures and reversals on de minimis. This past week has been the equivalent of taking one step forward and two steps back,” she said. “Rushed announcements, hasty rollbacks, unforced errors—this administration claims they want to close the de minimis loophole, but they have consistently failed to implement their own policies—and have given us all severe whiplash along the way.”
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The Congresswoman, who has been a longtime proponent of closing the de minimis “loophole” (and led a coalition of 129 House Democrats in writing an open letter to former President Joe Biden asking him to do so), said lawmakers on both sides of the aisle have been frustrated about the lack of decisive action on from both administrations.
Biden attempted to push the issue closer to a resolution in his final months in office by introducing a Notice of Proposed Rulemaking (NPRM). Upon leaving office, he passed the baton to President Trump, who promised swift action on de minimis, calling it a day-one priority.
But so far, the speediest action of Trump’s second term has been the about-face on the decision that would have banned Chinese shipments from utilizing the duty-free trade exemption. Last week, just one day after implementing 10-percent tariffs on China-made goods and signing an executive order banning any shipments subject to the tariffs from de minimis treatment, the administration hit pause on the action, causing mass confusion among shoppers, shippers and operators of overseas e-commerce platforms.
DeLauro bemoaned Trump’s waffling. “Despite there being a bipartisan consensus on the issue, President Trump made big promises on the first day of his administration on January 20, but did not deliver,” she said. She also noted that stripping just one country—China—of de minimis privileges will only cause shipments to be “routed into the U.S. through other intermediate destinations.”
Kim Glas, president and CEO of the National Council of Textile Organizations (NCTO), added that “If only China is denied these benefits, they will simply transship through other third-party countries.” The trade group leader, who also appeared at the press conference, said she had received reports that in light of a de minimis ban on China-made goods, Asian manufacturers were already ramping up production in Vietnam. “You can see how this is a de minimis whack-a-mole, if you’re only taking a country specific approach,” she said.
Because of this, DeLauro believes the federal government must “act comprehensively” to address de minimis on all fronts, eliminating the provision altogether.
She said a clear-cut, unilateral approach would “ensure that Customs and Border Protection, the U.S. Postal Service and the express shipping companies are able to manage the new screening and the assessment process necessary,” mitigating some of the inevitable slowdown that will arise when a new framework is put in place.
Getting out ahead of the issue is essential, she added, because there will be “a necessary transitional period.”
“Importers have to have the capability to shift back to the formal entry system, to invest in warehouse capacity for more packages,” she said. “What is a reasonable time to be able to make this change? What are the storage capacities? What needs to be done in that area? There is additional personnel that needs to be to be hired, and that has to be taken into consideration,” she said. “These are the things that have to be sorted out. And clearly in terms of the Trump administration, it doesn’t appear that anything these days is well thought out.”
Notably, DeLauro took aim at shippers, saying they should be “held accountable” as they “profit tremendously off non-taxed de minimis packages.” In fact, DeLauro intimated that a White House meeting between President Trump and FedEx chairman Frederick W. Smith on Feb. 6 prompted the Commander in Chief to rescind the ban on de minimis shipments from China.
During the short-lived China de minimis ban, CBP issued a Federal Register Notice saying that shipments from China would instead be subject to a formal entry process, which would require more paperwork, CBP bonds and processing fees. When asked by Sourcing Journal whether she believes de minimis shipments should be subject to a formal entry process, the Congresswoman answered in the affirmative.
“I think that we need to have formal entry so that we can know that the full set of information about the product—so that CBP then makes the decision of what projects are riskier than others and what products they’re going to be dealing with in terms of inspection,” she said.
Glas agreed, but explained she believes such a rule would need to go further to ensure its efficacy. “The Federal Register Notice last week required formal entry for international mail shipments, but that didn’t include all the air cargo shipments and other methodologies in which de minimis comes in,” she said. In fact, international mail represents but a fraction of de minimis overseas transport—packages are mailed through express carriers, too.
An informal entry process, while less rigorous for CBP as well as the importer (the end consumer), wouldn’t provide the necessary framework to weed out violative shipments, she believes.
“The informal entry environment does not require you to submit [a Harmonized Tariff Schedule] code to figure out ‘What is the duty that I need to apply for that package, and who is the U.S. importer of record to hold accountable when illegal, illicit, undervalued… fraudulent products are coming in,’” she said.
“During this analysis by the Trump administration, they’re going to need to require certain information elements to ensure that we know what’s in the box and that there are folks that are culpable when they are trying to violate our trade laws,” Glas added.
With about 4 million packages entering the country daily under the de minimis exception, there’s no time to lose, according to DeLauro. The Congresswoman previously supported Rep. Earl Blumenauer’s (D-Ore.) Import Security and Fairness Act, which aimed to prohibit nonmarket economy countries and nations on the priority watch list from receiving de minimis treatment.
“What does this mean for the economic security of the United States, and what does it mean for the health security of the United States? We’re asking the president to act, which he can,” she said. In the meantime, Congressional support for de minimis reform is swelling. “We’re going forward with legislation as well,” DeLauro said. “We’re not we’re not stopping; we’re going to find a way to do this.”
