The Importance of Section 321 De Minimis in Trade and Customs Law
Section 321, also known as de minimis, is an important trade and customs law that has been the topic of intense debate in the trade policy arena. For nearly 100 years, this law has allowed goods valued less than $800 to enter the United States free of customs duty. However, recent proposals and bills in Congress threaten to eliminate the economic value of de minimis, which could have serious implications for American businesses and consumers.
Who Uses De Minimis?
American businesses and consumers benefit from de minimis on a daily basis. More than 2 million low-value shipments arrive in the U.S. daily, covering a wide range of everyday items. Small businesses, such as Greentop Gifts and AnaOno, benefit from the tax exemption to save on goods that they ship across the country, serving consumers who benefit from affordable goods delivered in a timely manner.
What’s at Stake for Businesses and Consumers?
If Congress rolls back the Section 321 import tax break, the burden would be placed directly on businesses and passed along to the consumer, compounding the effects of current inflation. Projections show that consumers could see an extra $50 added to individual goods currently using de minimis. These items would also take longer to arrive at consumers’ doorsteps, impacting the competitiveness of American small businesses by increasing their “time to market” production.
Is Additional Screening for Section 321 De Minimis Shipments Needed?
Additional new security measures on de minimis shipments would be unnecessary, as lower-value shipments are already subject to screening by more than 50 federal agencies enforcing over 500 U.S. laws. It is important for lawmakers to understand that they do not need to choose between maintaining de minimis and ensuring compliance in shipments that power our economy—they can and should do both.
How Congress Can Improve De Minimis
Instead of eliminating de minimis, Congress can consider alternative approaches to improve the compliance and enforcement of current requirements. This can be achieved through measures such as adopting modern technology and conducting ongoing compliance measurements across all types of shipments.
In conclusion, de minimis plays a critical role in supporting American businesses and consumers by allowing low-value shipments to enter the United States free of customs duty. Congress should carefully consider the economic implications and the impact on American small businesses and consumers before making any changes to this important law.
About the Author
John Pickel is the senior director of international supply chain policy at the National Foreign Trade Council, a business association dedicated solely to advancing the interests of U.S. companies in international commerce.
For more information, visit the National Foreign Trade Council website at www.nftc.org.