De Minimis Not Part of House's China Week Schedule

Coalition for a Prosperous America Senior Vice President for Public Affairs Nick Iacovella said in a phone interview, "It’s pretty clear that there’s a large number of bills missing from that slate."

However, Iacovella said the Coalition for a Prosperous America, which is a leader in a coalition to restrict or eliminate de minimis, isn't disappointed that the bill that passed out of House Ways and Means in April is not on the agenda.

"I don’t think that that bill that passed out of Ways and Means would have passed the full House," he said, and he said his organization wants something stronger than removing goods subject to Section 301 tariffs or other trade actions from de minimis eligibility.

"If they were going to put a de minimis bill on the floor, it should be significant in achieving that goal," Iacovella said.

CPA has heard from "a couple dozen" House Republicans who are upset with the list of bills, he said. "There’s one House Republican who messaged me and said: 'China ‘week, more like China weak,’ and I think that’s a sentiment that a lot of members are feeling."

Iacovella said earlier versions of the list of bills included H.R. 6762, a bill from Rep. Carol Miller, R-W.Va., that wouldn't allow Chinese firms to apply for manufacturing tax credits for U.S. production of green goods available through the Inflation Reduction Act, and H.R. 6175, which also barred manufacturing tax credits as well as tax credits that reward green energy production or investment, if the products made by Chinese firms were part of the project.

Iacovella said there were discussions about trying to find a compromise between the House Ways and Means approach and Oregon Democratic Rep. Earl Blumenauer's de minimis bill, which would have barred any good with Chinese origin from entering under de minimis. He said CPA supports the Blumenauer bill, and he thinks if it was offered under a rule, it would pass. (Most of the bills that are part of China week are on the suspension calendar, which means they get a vote with no time for debate. Those suspension bills must get two-thirds support to pass.)

"We would support moving those discussions along," he said. "Maybe it’s something they could come to agreement on by the end of the year."

Nicole Bivens Collinson, who leads the Sandler Travis government relations practice, said, "I am a little surprised" that a de minimis bill wasn't on the list. She added: "but I also think that it’s not quite ripe."

She said there are a lot of ideas in Congress on how to address the challenge of contraband or other compliance problems in de minimis.

She said as she lobbies on the Hill, she asks: "What are the issues you’re trying to resolve?" Is it that you want to know who the seller is and who the buyer is? Is it that you want to collect Section 301 duties on goods entering in small packages? Is it that you want fewer packages to enter in de minimis?

She said unless there's a plan to process tariff payments and keep the flow of packages moving at the same speed, "it could bollix everything up."

While CBP has tried to develop technology, to analyze data or actual boxes, that would allow better screening without slowing the flow too much (see 2304170052), Brandon Lord, executive director of CBP's Trade Policy and Programs Directorate testified earlier this year that with dramatic increases in volume and the speed with which shipments move, CBP has not been able to increase its facilities, tools and staffing to keep up (see 2405070063). His testimony at a House hearing stated: "The de minimis exemption was created to avoid expense and inconvenience to the Government disproportionate to the amount of revenue that would otherwise be collected; however, the opposite is proving true... ." He said there are "high rates of non-compliance found in this environment."

Bivens Collinson said that if CBP had to separate out packages with goods taxed under Section 301 until the buyers paid a tariff, there would be no place to put them all. CBP has projected that about 1.3 billion packages will come to the U.S. this year through de minimis; it's estimated that shipments from China are about 60% of that flow.

"I think they are worried about unintended consequences," she said of members of Congress.

Iacovella said the discussion around de minimis talks too much about tariffs, and said that CPA is not arguing that goods that are imported directly by consumers should have tariffs. He said CPA wants a better process, such as the one for informal entries, which covers goods between $800 and $2,499.

"Every person that we’ve talked to at customs that is actually in charge of processing packages is in favor of closing the de minimis loophole -- getting rid of it," he said. He said he was talking with a CBP officer in Jacksonville, Fla., who said that de minimis has "basically created complete lawlessness at the border."

He said the evidence is mounting that the current de minimis situation is unsustainable. He cited a speech from Lord (see 2309110059) a year ago that said CBP had visited nearly a dozen brokers who had repeatedly facilitated the entry of packages containing fentanyl, filing Type 86 data for those shipments.

Iacovella doesn't want electronic clearance in exchange for more data to be put into law, as is proposed in a de minimis restriction bill introduced by Senate Finance Committee Chairman Ron Wyden, D-Ore., (see 2408020031), though he praised the bill for ending de minimis eligibility for apparel. That bill, which had two Democratic and two Republican co-sponsors, shows there's "a strong consensus of Republicans and Democrats that agree that de minimis is a serious problem and the loophole should be closed." he said.

"It’s just a matter of time before there’s significant action taken on it. It’s unfortunate the house wasn’t able to come to an agreement. This is something that would need to get bipartisan approval to pass," he said, because there are enough House Republicans who don't want to change de minimis that it cannot pass that chamber with only Republican votes.

Bivens Collinson said that while there may be trade legislation moving in the lame duck, if de minimis restriction is part of it, she doesn't think it will be close to the Wyden bill's language. "It’s drastic," she said.