The de minimis threshold for imports into the United States has been a topic of increasing debate in recent years, especially in the context of the burgeoning e-commerce sector. Recent legislative proposals suggest significant changes that could redefine how the US manages its import tariffs, impacting countries differently based on new criteria.

Current State of De Minimis Threshold in the US

Presently, the de minimis threshold in the US stands at $800, a figure that was raised from $200 in 2016 under the Trade Facilitation and Trade Enforcement Act. This threshold is the highest globally, substantially exceeding that of other regions such as the European Union, where it’s set at €150 ($160.83). This discrepancy has been a point of concern for US lawmakers, especially in light of the surge in low-value e-commerce imports, particularly from China.

The Proposal for New De Minimis Rules: The Americas Act

The Americas Act (AA), proposed by Republican congresswoman Maria Elvira Salazar, introduces a comprehensive set of revisions to the current de minimis regulations. This legislation aims to revamp the tariff system, promising significant implications for international trade, especially with countries like China and Russia.

Key Features of the Proposed Americas Act

• Adjustment of De Minimis Threshold: The new rules propose aligning the US de minimis threshold with that of the country of origin. For example, a package from Germany would have a de minimis of €150 ($162), and from the UK, £135 ($170).
• Introduction of ‘The Blacklist’: A critical component of the AA is the establishment of ‘the blacklist,’ a record of countries deemed non-trustworthy, which would be denied de minimis privileges. China and Russia are set to be automatically blacklisted, a move anticipated to generate significant revenue.
• Criteria for Blacklisting: The conditions for adding a country to this list include violations of the Uyghur Forced Labor Prevention Act, transshipment of goods through blacklisted countries, harm to US industries, and export of hazardous goods to the US.
• Funding for Near-Shoring Initiatives: The act also includes provisions to incentivize near-shoring of industries, particularly in the textile sector, with an allocation of $14 billion. The funding for this is expected to come from increased tax revenues generated by the revised de minimis rules.

Impact on E-commerce and International Trade

Should the AA pass, it would mark a significant shift in the US’s approach to managing imports, especially in the e-commerce sector. An increase in ‘creative declarations’ to stay under the new thresholds is expected, potentially impacting airfreight and other import channels. This development comes at a time of political uncertainty in the US, with the upcoming presidential election adding to the unpredictability of the bill’s passage.

The Road Ahead: Legislative Process and Industry Implications

The proposal, while in its nascent stages, has garnered support from key players in Congress, suggesting a strong likelihood of at least some form of the bill passing. This change would fundamentally alter the landscape of international trade, particularly for countries heavily reliant on e-commerce exports to the US.

Potential Challenges and Considerations

• Impact on Small and Medium Enterprises (SMEs): SMEs, especially those reliant on low-value exports, could face challenges adapting to the new threshold and blacklisting rules.
• Increased Administrative Burden: The implementation of variable de minimis thresholds based on country of origin could lead to a more complex customs process, impacting logistics and supply chain efficiency.
• Global Trade Relations: The introduction of ‘the blacklist’ and adjusted thresholds may strain trade relations with certain countries and alter global trade dynamics.

Conclusion

The proposed changes to the US de minimis rules represent a significant shift in the country’s approach to international trade, with potentially far-reaching consequences. Stakeholders in the e-commerce and logistics sectors, as well as international trading partners, will need to closely monitor these developments to adapt effectively to the new landscape. The path ahead is marked with legislative processes and geopolitical considerations, making the future of the Americas Act and its implications a critical subject for global trade observers.