Closing the De Minimis Loophole Act introduced in D.C.

WASHINGTON – U.S. Senators Sheldon Whitehouse (D-RI) and Lindsey Graham (R-SC) today introduced the Closing the De Minimis Loophole Act, bipartisan legislation to end the “de minimis” exemption, which allows packages valued at less than $800 to be imported to the United States without facing any tariffs or inspection.

In a release from Sen. Whitehouse’s press office, shared by the National Council of Textile Organizations, supporters of the legislation say it would stem the flow of illicit drugs into U.S. and protect the competitiveness of American manufacturers. NCTO President and CEO Kim Glas supports the legislation.

“We commend Senators Sheldon Whitehouse and Lindsey Graham for their leadership and support of this important bipartisan legislation that would codify and permanently end de minimis treatment for China immediately, while phasing out de minimis for all other countries after a four-month transition period,” said Glas.

“This bill, a companion to legislation in the House, is the strongest and most comprehensive legislative solution to closing the destructive de minimis loophole once and for all.  De minimis has become a gateway facilitating four million packages a day valued at $800 or less, often containing illegal, unsafe and unethical products made with forced labor to the U.S. market, duty free and virtually unchecked.

“The legislation will help level the playing field for the domestic textile industry, which has lost 28 textile plants over the past 22 months. We strongly support this legislation and look forward to working with Senators Whitehouse and Graham to advance it.”

See also:

• Trump slams the door on de minimis loophole for Chinese goods 
• Closing de minimis loophole proves to be a customs challenge

“Given the explosion of e-commerce and increasingly complex global supply chains, we need to modernize our customs laws to better stop cartels and international criminals from slipping deadly fentanyl into our communities,” said Whitehouse, who helped convene the Rhode Island Textile Innovation Network. “Closing the De Minimis Loophole will also protect Rhode Island workers and manufacturers, while punishing shady foreign companies for skirting our trade laws to undercut domestic companies.”

“This legislation closes a loophole in order to protect Americans from fentanyl and other illicit drugs that are flowing into our country,” said Graham. “It also safeguards South Carolina manufacturers, ensuring they can remain competitive in the global market. I’m glad to work with my colleagues on this important effort.”

The release states that “Chinese e-commerce giants, as well as criminals and cartels, abuse gaps in U.S. customs law and the law’s implementation to move their illicit or illegally produced products into the United States. These foreign bad actors are exploiting a customs process known as ‘de minimis’ entry, which allows packages valued under $800 to enter the country without tariffs and through a simplified process. As the number of these shipments has surged in recent years, Customs and Border Protection has struggled to identify and block packages containing illicit fentanyl precursor chemicals, counterfeit goods, items produced with forced labor and other illegal products.”

The release states that Closing the De Minimis Loophole Act would:

• Immediately end de minimis treatment for packages from China and phases out de minimis for all other countries after a four-month transition period.
• Direct the Treasury Secretary to oversee a rulemaking process during the four-month transition, ensuring that U.S. Customs and Border Protection has the necessary tools and procedures to implement the termination of de minimis for all countries smoothly and efficiently.
• Direct the Treasury Secretary to consult with the Postmaster General to establish appropriate fees and entry procedures, aiming for consistency between postal and other shipments wherever feasible.

The Closing the De Minimis Loophole Act was previously introduced in the House of Representatives by Congresswoman Linda Sánchez (D-CA). The legislation is endorsed by the NCTO, the United Steelworkers, National Assn. of Police Organizations, Facing Fentanyl, Rhode Island Textile Innovation Network, and Alliance for American Manufacturing.

The U.S. textiles industry employs nearly 471,000 workers and produces almost $64 billion in output annually. Last August, Whitehouse and Graham introduced the Protecting American Industry and Labor from International Trade Crimes Act, legislation to strengthen the Department of Justice’s ability to investigate and prosecute trade-related crimes.

Whitehouse and Senator Bill Cassidy (R-LA) previously introduced the bipartisan Customs Modernization Act of 2023, legislation to increase U.S. Customs and Border Protection’s visibility into international supply chains to resolve data collection constraints, expand the legal use of trade data, increase supply chain accountability, improve enforcement effectiveness and bolster information sharing among government agencies.

The full bill text is available here.