## Understanding the De Minimis Trade and Customs Law
By John Pickel
In this article, we will dive into the important trade and customs law known as de minimis, also referred to as “Section 321,” and explore the impact it has on businesses and consumers in the United States. We will also discuss the current debate surrounding this law and provide insights on how Congress can improve de minimis without negatively affecting American businesses and consumers.
### The Importance of De Minimis
The de minimis threshold has allowed goods valued less than $800 to enter the United States free of customs duty. This exemption has been in place for nearly 100 years and has been a critical tax break for American businesses and consumers. It has allowed over 2 million low-value shipments to enter the U.S. daily, benefiting various businesses and consumers across the country.
### The Current Debate
The recent introduction of the Import Fairness and Security Act threatens to eliminate the economic value of de minimis without effectively addressing perceived enforcement gaps. This has sparked intense trade policy debates and raised concerns about the impact it could have on businesses and consumers.
### Implications for Businesses and Consumers
If Congress rolls back the Section 321 import tax break, businesses and consumers will face significant repercussions. Prices are likely to soar, and items will take longer to arrive, impacting the competitiveness of American small businesses and increasing the “time to market” production.
### Addressing Enforcement Gaps
To improve de minimis without hurting American businesses and hiking prices for consumers, Congress should consider the following solutions:
– Effectively share and use information provided on shipments to address gaps in enforcing current requirements.
– Conduct ongoing compliance measurements across all types of shipments.
– Adopt modern technology, such as artificial intelligence and machine learning, to identify illicit activity.
### FAQs About De Minimis
– **What is a Section 321 de minimis shipment?**
De minimis treatment of low-value shipments, valued under $800, refers to an exemption from requirements to pay duty under Sec. 321 of the Tariff Act of 1930.
– **Is the de minimis exception for shipping going away?**
While there has been media reporting and bills in Congress seeking to restrict de minimis authority, there are no formal proposals to revoke de minimis treatment of low-value shipments.
### About the Author
Post by: **John Pickel**
John Pickel is the senior director of international supply chain policy at the National Foreign Trade Council, a business association dedicated to advancing the interests of U.S. companies in international commerce.
Company: National Foreign Trade Council
In conclusion, the debate surrounding de minimis is ongoing, and it is crucial for lawmakers to understand the economic implications while ensuring compliance in shipments that power our economy. With the right approach, Congress can maintain de minimis and address enforcement capabilities to benefit businesses and consumers alike.