Modernizing Customs Policies: Focus on Low-Value Imports

Trade Update • June 1, 2023

uring a recent House Ways and Means Trade Subcommittee hearing on customs modernization, significant attention was given to the future of low-value imports, in addition to the importance of transparent trade data for air and land shipments. These topics emerged as key points of discussion, reflecting the committee’s focus on adapting customs policies to the evolving trade landscape.

Section 321 De Minimis Loophole

U.S. Representative Earl Blumenauer (D-OR), chairman of the House Ways and Means Trade Subcommittee, stated that imports, particularly from China, are able “to evade oversight and duties at the border and to undercut U.S. companies that play by the rules.” In 2022, Blumenauer introduced new legislation to strengthen U.S. international trade import laws to stop non-market economies and goods from exploiting the de minimis threshold that allows imports valued under $800 to come into the United States without paying duties, taxes, or fees.

An increase in the de minimis threshold from $200 to $800 has been identified as a primary reason for an explosion in e-commerce imports. “The number of packages we receive in the United States has skyrocketed to more than two million daily packages—a number that will only climb in the coming years. As long as foreign companies that sell their goods in America are splitting up their shipments to evade tariffs and oversight, American businesses will continue to be put at a competitive disadvantage cost-wise,” said Blumenauer. “This loophole also makes it easier for people to import illegal goods and harmful products, because there is virtually no way to tell whether these packages contain products made through forced labor, intellectual property theft, or are otherwise dangerous.”

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Trade Data Transparency

During the hearing, Brenda Smith, Global Director of Government Outreach, Expeditors International, emphasized the significance of digitizing government agency requirements within supply chains while minimizing redundant data collection. She stressed the importance of collecting essential data from the appropriate parties at the right time, underscoring that data quality holds greater value than sheer quantity.

Michael Kanko, CEO of trade data firm ImportGenius, pointed our the imperative need to enhance supply chain transparency by mandating the publication of air data. He highlighted that air and truck cargo accounts for 46.5 percent of the total U.S. import value. Kanko argued that by not publishing air and land data, crucial insights are being overlooked, including numerous high-value products.

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