News / US plans new import tax thresholds 'to close loopholes exploited by China'

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Proposed new de minimis rules could see countries paying different tariffs for their imports into the US – with some denied the privilege altogether. 

The current de minimis threshold for imports into the US is $800, increased from $200 in 2016 with the Trade Facilitation and Trade Enforcement Act. This is the world’s largest threshold –π for example, across European Union member states it is €150 ($160.83).  

US lawmakers have been looking to change the de minimis rules for the past few years, particularly driven by the tsunami of low-value e-commerce imports from China that fly under the tax threshold. According to the Wall Street Journal, de minimis entries to the US represent roughly $67bn in lost tax. 

The Americas Act (AA), formally proposed by Republican congresswoman Maria Elvira Salazar on 6 March, offers a roadmap to new de minimis rules.  

The act promises to offer $14bn to the domestic textile manufacturing sector to incentivise near-shoring, which the commissioners who presented the AA suggested could be funded by more tax revenue from proposed de minimis rate changes.  

“This will not cost American taxpayers one penny. This legislation is fully paid for by closing the tariff loopholes China has used to enrich itself for the past 30 years,” said Ms Salazar. 

The new de minimis threshold would be the same as that for the country where a parcel originated. For example, a package from Germany would have a €150 ($162) de minimis, and from the UK it would be £135 ($170).  

However, the act also states that, with the new thresholds would come ‘the blacklist’, which would be a record of “non-trustworthy countries” that would be denied de minimis privileges altogether. 

China and Russia will automatically be blacklisted, which alone could likely raise more than $15 bn of new revenue a year the proposal estimates. The full blacklist would be published within a year of the AA implementation. 

Conditions for adding a country to the blacklist include violations of the Uyghur Forced Labor Prevention Act, transhipment of goods through countries on the list, ‘harm to industry’ in the US, exporting goods that pose public safety risks, including narcotics, to the US. 

Any country blacklisted would remain on the list until the “secretary [of state] certifies to Congress that the government of the country has made progress with respect to the considerations described.” 

While the AA is still in its early stages, and has yet to be amended and voted on by various parties in the US legislative system, a reduction of the $800 de minimis threshold is looming. 

A Republican Congress staff member told The Loadstar: “That part won’t be taken out of the bill for sure, because it’s the way to pay for the near-shoring programmes. And probably, of everything in the bill, it is the thing that has the broadest support. Major players in Congress agree with moving trade and supply chains to the western hemisphere.”

A US e-commerce source told The Loadstar: “Should this pass, it would certainly have a huge effect on importers, as well as the e-commerce logistics providers. ‘Creative declarations’, to ensure falling under the de minimis threshold would increase, and imports (in particular airfreight) would take an initial hit.” 

However, the source also noted that November’s presidential election made any politics in the US uncertain in the short-term, and was doubtful the bill would pass.