US Lawmakers Urge Biden to Address Tariff ‘Loophole’ for Chinese Small Package Imports

Majority of House Democrats Call on Biden to Close Tariff Loophole

A significant number of Democratic members of the U.S. House of Representatives urged President Joe Biden to leverage his executive authority to eliminate a tariff loophole that they assert is being misused by Chinese e-commerce companies and opioid traffickers.

In a letter, the lawmakers requested the termination of the "de minimis" trade provision, which allows items valued at less than $800 to enter the United States without duties or customs inspections, provided they are sent to individuals.

This considerable exemption has contributed to the rise of Chinese e-commerce platforms like Shein and Temu, which deliver products straight to American consumers from China. Other retailers, such as Amazon and Walmart, have also taken advantage of this provision. Historically, this small-package exemption has been part of U.S. trade law since 1930, with the threshold increased to $800 from $200 in 2015.

The letter’s signatories, including lawmakers Earl Blumenauer, Rosa DeLauro, and Tom Suozzi, contended that the de minimis provision was being exploited by those trafficking in the dangerous opioid fentanyl and its precursor chemicals.

"The urgency of closing the de minimis loophole cannot be overstated. Americans continue to die from mislabeled fentanyl-laced pills that are ordered online, skirt inspection thanks to de minimis, and are delivered to Americans’ doorsteps," the lawmakers stated. They further noted that de minimis imports, particularly from China, evade most current trade enforcement measures, including the Uyghur Forced Labor Prevention Act and Section 301 tariffs aimed at addressing trade violations.

The National Council of Textile Organizations, which advocates for domestic manufacturers, claimed that de minimis shipments from fast-fashion retailers like Shein are avoiding punitive Section 301 tariffs on many Chinese textile imports, prompting the closure of 18 U.S. plants in the past year alone.

The volume of these shipments continues to rise, with over 4 million packages arriving under the threshold daily, surpassing 1 billion in total last year. Data from the U.S. Census Bureau indicates that the value of imports classified as low-value shipments under the de minimis threshold has more than doubled since 2014, reaching $23.4 billion last year, making it the 12th largest U.S. import category. This category ranks just ahead of medium-duty pickup trucks, predominantly imported from Mexico. Notably, imports from China in this category also more than doubled, reaching $4.6 billion, positioning it as the eighth largest category after computer monitors.

A spokesperson for the White House was unavailable for comment regarding the lawmakers’ request. They are also working on proposed legislation aimed at closing the de minimis loophole.

The National Foreign Trade Council, representing various U.S. business interests, warned that such a move could raise costs for consumers at a time when inflation is a pressing issue in the November presidential election campaign. "Weakening de minimis would cost consumers billions, require new appropriations for Customs and Border Protection, and do nothing to enhance enforcement or improve security at our ports," remarked NFTC supply chain senior director John Pickel in a statement.