The e-commerce importers have taken advantage of de minimis, which allows packages valued under $800 to enter the U.S. duty free and dodge U.S. inspections.
New legislation introduced by a bipartisan group of Senators on Thursday aims to stem the tide of low-value packages entering the U.S. duty-free thanks to a trade loophole, one that has benefited Chinese brands like SHEIN and Temu at the expense of U.S. manufacturers and producers.
The Fighting Illicit Goods, Helping Trustworthy Importers, and Netting Gains (FIGHTING) for America Act tightens the rules for imports to enter the U.S. under “de minimis,” which allows anything valued under $800 to avoid tariffs.
Under the legislation, goods that are considered “import sensitive” or subject to additional trade remedies would not qualify for de minimis, a move designed to encourage a shift back to container ship imports over individual packages. Import-sensitive products include textiles, apparel, and leather goods — meaning a whole lot of stuff made by SHEIN and Temu would likely apply.
The bill also requires U.S. Customs and Border Protection to collect more information about commercial packages, with the goal of targeting and seizing illicit goods and increasing penalties for bad actors. It also would introduce a $2 fee per shipment for the use of de minimis entry procedures.
De minimis originally was intended to make it easier for individuals to bring small items into the United States, like tourists returning with souvenirs from a trip overseas. But online retailers like SHEIN, Temu, and even Amazon have exploited de minimis to import individual packages into the United States at massive volumes — 4 million de minimis packages enter the country every day, amounting to 1 billion a year — which is clearly not what de minimis was intended to do.
It’s not just ultra cheap, sweatshop-made, possibly toxic clothing making its way onto U.S. shores, either. There’s also evidence that fentanyl is being shipped into the United States via de minimis, contributing to an epidemic that claimed the lives of 112,000 Americans last year.
“Foreign corporate giants are inundating our borders with millions of low-value packages, making it tough for customs agents to stop dangerous goods like fentanyl from falling into Americans’ hands,” said Sen. Ron Wyden (D-Ore.), lead sponsor of the legislation and chairman of the Senate Finance Committee. “Americans should feel confident that anything arriving on their doorstep is safe, legal, and ethically produced. Our legislation would crack down on foreign companies abusing the law and make sure they play by the rules.”
Co-sponsors of the FIGHTING for America Act include Sens. Cynthia Lummis (R-Wyo.), Sherrod Brown (D-Ohio), Susan Collins (R-Maine), and Bob Casey (D-Pa.).
Wyden isn’t the only Member of Congress at the forefront of the issue. Rep. Earl Blumenauer (D-Ore.) has advocated for action on de minimis for years, and his Import Security and Fairness Act would stop goods from any non-market economy country or those on the U.S. Trade Representative’s Priority Watch List from using de minimis. Brown, it is worth noting, also sponsored that bill.
The Alliance for American Manufacturing is a strong supporter of the Import Security and Fairness Act, but we also back the new FIGHTING for America Act. While it doesn’t go quite as far as the Import Security and Fairness Act, the new bill is a big step in the right direction — and it’s past time that the United States take action to fix this loophole.
As the saying goes, we must not let perfect be the enemy of good. U.S. manufacturers and workers have long been paying the price for our government’s failure to close the de minimis loophole, while Chinese e-commerce brands enjoy duty-free access to the U.S. market. It’s especially encouraging that the FIGHTING for America Act places strong emphasis on apparel products, including those made by companies like SHEIN and Temu.
But mitigating the damage from de minimis will require an effort across government. It’s vital that U.S. Customs be given the tools and resources needed to inspect packages and guard against evasion and trade cheating — and the U.S. must avoid anything that inadvertently limits inspections or hamstrings the agency with new limitations.
Indeed, strengthening U.S. trade enforcement mechanisms across the board is critical if we truly want to stand up for American manufacturers and factory workers. Passage of the Leveling the Playing Field Act 2.0, for example, would create new trade tools to target the increasingly sophisticated tactics used by trade cheaters to avoid enforcement.
What the U.S. cannot do, however, is continue to sit on its hands. AAM is supportive of both the Import Security and Fairness Act and the FIGHTING for America Act because the U.S. simply must do something about the loophole that is giving bad actors in China a major benefit over our own producers. It’s time for Congress to get to work.