• Logistically Speaking...What's the future of de minimis?

  • Oct 28 2024
  • Length: 51 mins
  • Podcast

Logistically Speaking...What's the future of de minimis?

  • Summary

  • De minimis, originating from Section 321 of the Tariff Act of 1930, has evolved from its humble $5 threshold (equivalent to $85-90 today) to become a cornerstone of modern e-commerce imports. While the 2015 Trade Facilitation and Trade Enforcement Act's increase to $800 grabbed headlines, U.S. Customs and Border Protection (CBP) notes that the average de minimis shipment value remains around $55-60. The real story isn't the threshold increase, but rather how the pandemic accelerated e-commerce adoption, leading to an unprecedented surge in these shipments—from hundreds of thousands just a handful of years ago to 1.4 billion in fiscal year 2023.

    The implications of de minimis extend far beyond simple duty exemptions. This provision has reshaped supply chains, particularly for high-duty products like apparel and footwear, by enabling companies to fulfill orders directly from overseas warehouses or through facilities in Mexico and Canada. While this has benefited consumers through lower prices and faster delivery times, it's created significant challenges for CBP's enforcement capabilities, particularly in screening for counterfeits and illegal substances like fentanyl.

    In this episode, we explore:

    • The various methods of processing de minimis shipments, including Type 86 entries, manifest clearances, and the unique advantages of different transportation modes
    • How the Consumer Product Safety Commission's upcoming e-filing requirements in 2025 could reshape the landscape for apparel and children's products
    • The political battle between government agencies seeking stricter controls and private sector entities defending current practices
    • Potential regulatory changes, including CBP's proposed $2 per package fee and the possible exclusion of "import-sensitive" products
    • The evolving role of customs brokers in this changing landscape, transitioning from data entry to strategic advisors
    • The impact of artificial intelligence and technology on customs processing and compliance

    Guest: Tom Gould, Principal of his own consultancy, licensed customs broker, Certified Customs Specialist, and current member of the public-private COAC committee, appointed by Treasury Secretary Yellen and DHS Secretary Mayorkas in 2022.

    Join us for an in-depth discussion on this crucial topic that's reshaping international trade and e-commerce.

    Source Material:

    US bipartisan FIGHTING for America Act aims to close de minimis loophole

    White House De Minimis Fact Sheet

    Blumenauer Legislation Announcement

    WSJ: Trade ‘Loophole’ Used By China Should Be Closed, House Democrats Tell Biden (paywall)

    CBP Trade Enforcement and Trade Facilitation Act of 2015

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