Biden-Harris Administration Takes Action on De Minimis Shipments to Safeguard Consumers and Economy

Feature and Cover Biden Harris Administration Takes Action on De Minimis Shipments to Safeguard Consumers and Economy

The Department of Homeland Security (DHS) and U.S. Customs and Border Protection (CBP) are at the forefront of enforcing new executive actions from the Biden-Harris Administration. These measures aim to protect American consumers, workers, and businesses by addressing the rapid increase in small packages that use the de minimis exemption, which allows low-value shipments to enter the U.S. without duty or taxes. CBP is responsible for ensuring that shipments comply with U.S. laws by targeting and blocking any that violate regulations. These actions are intended to secure national economic safety, eliminate forced labor from supply chains, and keep dangerous goods, including illegal opioids like fentanyl, out of the country.

The executive actions aim to strengthen accountability and enforcement against the misuse of the de minimis exemption, particularly by Chinese e-commerce platforms, which have been sending increasing numbers of shipments claiming the exemption. The de minimis exemption permits duty-free entry for goods valued at $800 or less, with CBP processing nearly four million such shipments daily. However, these small packages can still pose significant risks, including health hazards and threats to economic security. In fact, as of July 2024, 89% of cargo seizures, including 97% of narcotics seizures, came from de minimis shipments.

Alejandro N. Mayorkas, Secretary of Homeland Security, expressed the Administration’s determination to address the evolving challenges posed by global e-commerce. “The actions announced today by the Biden-Harris Administration will help the Department keep pace with global electronic commerce and improve our ability to protect communities from fentanyl and its precursor chemicals,” Mayorkas said. He emphasized the need for cooperation with Congress to pass comprehensive de minimis reform legislation that will provide border officials with the tools necessary to effectively manage the influx of small-dollar shipments.

Robert Silvers, DHS Under Secretary for Policy and Chair of the federal Forced Labor Enforcement Task Force, highlighted the importance of these new actions in protecting Americans. “Today’s actions will give us strong tools to ensure that imported goods comply with U.S. laws that serve to protect Americans,” Silvers remarked. He underscored the Administration’s commitment to eliminating forced labor and keeping illicit goods, including fentanyl, out of U.S. markets.

Troy Miller, Senior Official Performing the Duties of the CBP Commissioner, pointed out that despite CBP’s multi-layered enforcement strategy, the agency is hindered by outdated laws and limited resources. “These executive actions are a critical first step in modernizing our enforcement mechanisms in the small package environment so we can better protect the health and safety of Americans,” Miller explained. He stressed the need to further modernize trade laws to enhance CBP’s ability to crack down on abuse of the de minimis exemption.

The executive actions introduced new rules aimed at improving the oversight of de minimis shipments. These rules will increase the amount of information collected on shipments to improve transparency and enable CBP to better protect consumers from dangerous goods. Additionally, they will prevent certain products, particularly from Chinese e-commerce platforms, from qualifying for duty-free entry, addressing a loophole that has allowed low-value goods, such as textiles, to flood the U.S. market. Importers of consumer goods will also be required to electronically file Certificates of Compliance to ensure products meet U.S. safety standards.

These regulatory changes will be phased in over the coming weeks and months, but the Administration is also seeking legislative reforms to tackle the challenges associated with de minimis shipments. One of the key proposals is to exclude import-sensitive products from de minimis treatment, particularly those subject to U.S. trade enforcement actions, such as Section 301, Section 201, and Section 232 tariffs. The Administration is also pushing for passage of the Detect and Defeat Counter-Fentanyl Proposal, which aims to strengthen CBP’s ability to track and seize fentanyl and its precursor chemicals that are entering the U.S. through small packages.

The proposal would allow CBP to demand additional documentation on de minimis shipments, improving the agency’s capacity to analyze risks and identify patterns of illegal activity. The legislation would also introduce a user fee on de minimis packages to help fund the necessary personnel and technology to detect illicit fentanyl. Additionally, tougher penalties would be implemented to deter drug trafficking and incentivize businesses to police their own supply chains for narcotics risks.

The DHS has been building on recent efforts to strengthen enforcement of U.S. trade laws, with a particular focus on supporting U.S. textile manufacturers and eliminating forced labor from supply chains. In April, the DHS announced a strategy to combat illicit trade and support the American textile industry, spearheaded by CBP and Homeland Security Investigations (HSI). So far in Fiscal Year 2024, CBP has launched 18 Trade Special Operations (TSOs), focusing on small shipments containing textiles and apparel. These TSOs involve physical inspections of the goods and reviews to verify eligibility for preferential trade treatment under various agreements.

CBP has also initiated more than 553 verifications on textiles and apparel worth over $150.8 million, examining these shipments for correct classification and valuation. Additionally, the agency has begun audits on more than $6 billion in textile imports, aimed at verifying compliance with U.S. trade laws. The number of factory visits conducted by the Textile Production Verification Team (TPVT) has doubled compared to last year, with visits to 109 factories and six raw material providers.

The interagency Forced Labor Enforcement Task Force (FLETF), chaired by DHS, has added 26 entities from the textile sector to the Uyghur Forced Labor Prevention Act (UFLPA) Entity List in 2024, restricting imports from these entities into the U.S. DHS has pledged to continue prioritizing investigations into textile and apparel companies suspected of using forced labor, with the current UFLPA Entity List containing 73 entities across various industries.

The Administration remains committed to working with Congress on these legislative proposals to ensure that CBP has the resources, authority, and tools needed to safeguard American consumers, workers, and businesses. By closing loopholes and modernizing enforcement mechanisms, the executive and legislative actions taken by the Biden-Harris Administration represent a critical step in protecting the U.S. from the risks posed by de minimis shipments while facilitating legitimate trade.

The Biden-Harris Administration’s new executive actions aim to curb the misuse of the de minimis exemption in small shipments, particularly from Chinese e-commerce platforms, and protect American workers and consumers from dangerous and illicit goods. CBP will play a vital role in enforcing these rules whileseeking further legislative reforms to modernize trade laws and improve transparency. The Administration is also focused on combating the influx of fentanyl and forced labor in supply chains, with DHS leading efforts to strengthen trade enforcement and support U.S. industries.

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