News / Legal challenges for tariffs and de minimis, as EU eyes new ecommerce rules

© Lim Seng Kui |

Tariffs and ecommerce are in the legal spotlight on both sides of the Atlantic. 

A US autoparts retailer has filed a lawsuit in the Court of International Trade, arguing that ending the de minimis exemption is unlawful, and should be reversed.

The retailer said the policy change would force it to cease most of its operations by the end of next month. 

According to law firm Sandler, Travis & Rosenberg, the policy is unlawful because the de minimis statute cannot be altered by the president or any executive branch; and that it “is arbitrary and capricious in violation of the Administrative Procedures Act, because it ignored the impact on those that rely on the exemption, failed to consider related economic costs and benefits, did not take reasonable alternatives into consideration, and ‘has no articulated or apparent link to the problem the government cited as justification’.” 

The retailer said its autoparts were now subject to several tariffs, amounting to 72.5%, including the fentanyl tariff, imposed under the International Emergency Economic Powers Act (IEEPA). But the retailer argues that IEEPA allows the president to regulate imports, but not to levy tariffs. 

This retailer is not alone in going to the law courts: yesterday 12 US states claimed in a federal court that the president had exceeded his authority on tariffs, in one of at least seven similar lawsuits challenging the move. The States argued that IEPPA does not authorise the use of tariffs. And, even if it did, the trade deficit – which has existed for 49 consecutive years – is not an “unusual and extraordinary” threat, which is a requirement of the law to use IEPPA. 

In response, the government is citing Richard Nixon’s emergency use of tariffs in the 1971 economic crisis. 

Most observers believe the cases will end up in the Supreme Court. 

Meanwhile, change is also afoot in the EU, according to German newspaper DVZ. Concerns over the quality of ecommerce goods coming into the bloc have led the EC to look at setting up an EU market surveillance authority, as well as imposing a €2 processing fee per parcel. 

In a bid to stamp out counterfeit or unsafe goods, while protecting the business interests of EU companies as well as the environment, the commission believes a new authority could check goods, while member states could also levy additional surcharges.

It has also proposed abolishing the de minimis limit of €150.