Buckeye Reporter

WASHINGTON, D.C. – On June 2, 2023, U.S. Senator Sherrod Brown hosted a conference call to discuss the Import Security and Fairness Act, which would close a key loophole that foreign companies exploit to avoid paying duties and fees, to unfairly compete with Ohio businesses.

Right now, packages under $800 in valuation are exempted from U.S. duties, taxes, and fees. The number of packages using this loophole to avoid duties has exploded in recent years, to more than two million packages per day. Competitors will often split large shipments into many small packages to cheat the rules and evade the duties they owe, gaining an unfair competitive advantage.

Brown’s upcoming legislation would ensure low-value shipments from non-market economies, such as China, are no longer exempt from paying any duties, taxes, or fees to the U.S. Government.

“Our trade laws can only protect Ohio workers and Ohio businesses if they aren’t riddled with loopholes. This loophole is essentially a backdoor way for competitors like China to ship goods into the U.S. without paying the tariffs and other taxes and fees they owe,” said Brown. “Ohio workers should not be forced to compete with foreign competitors that cheat. Our bill would stop Chinese companies from abusing our trade laws to undermine Ohio businesses and their workers.”

Brown was joined on the call by Anderson Warlick, CEO of Parkdale Mills, which operates U.S. Cotton in Cleveland. Warlick discussed how this bill will support U.S. and Ohio Manufacturing.

“The de minimis $800 threshold is the highest in the world and is undermining U.S. manufacturers and U.S. workers. It is unfair, it cannot be regulated, and it’s full of fraud. Our de minimis program represents a unilateral disarmament of our customs enforcement and laws,” said Warlick.

Since 1938, the de minimis provision in U.S. trade law has allowed low-value packages to enter the U.S. through simplified import processes and without paying any duties, taxes, or fees to the U.S. government. However, the government has continually raised this limit throughout the years, with the current limit being set at $800 in 2016. This has resulted in a severe increase of e-commerce packages entering the U.S. that are just under this $800 limit in order to take advantage of de minimis provisions.

Currently, over 2 million packages enter the U.S. each day under de minimis provisions. Due to looser regulations on de minimis packages, the U.S. Customs and Border Protection (CBP) and Consumer Product Safety Commission have raised concerns about these packages allowing unsafe and illicit imports into the United States, including goods made with forced labor. These imports also gain a significant competitive advantage over similar, U.S.-made products as they do not have to pay duties, taxes, and fees at the border—especially if they come from countries with markets fueled by government intervention.

The Import Security and Fairness Act  is sponsored in the House by Congressman Earl Bluemenauer (D-OR-3).

A one pager of the legislation is available here.

Original source can be found here.