H.R. 1840: Closing the De Minimis Loophole Act

The bill titled "Closing the De Minimis Loophole Act" aims to amend the Tariff Act of 1930 to eliminate the de minimis treatment for certain imports. The de minimis rule currently allows goods valued at $800 or less to enter the United States without being subject to tariffs or duties. This bill would change that by removing this provision, thereby requiring tariffs or duties to be paid on all imports regardless of their value.

Key Provisions

• Elimination of De Minimis Treatment: The bill proposes to amend section 321 of the Tariff Act to do away with the $800 threshold that exempts certain goods from tariffs. This means that all products entering the U.S. will be subject to duties, regardless of their value.
• Delayed Applicability: The changes would be immediately enforceable for articles coming from China. For goods from other countries, the rules would apply after 120 days from the enactment of the bill.
• Rulemaking by the Secretary of the Treasury: The Secretary of the Treasury will have a 120-day period after the enactment of the bill to create rules and procedures to implement these changes. This includes ensuring that import data and procedures are sufficient for effective enforcement and accurate collection of duties.
• International Postal Agreements: For items sent through the international postal network that would have qualified under the prior de minimis exemption, the Secretary will determine fees and procedures to align their treatment with other shipments.

Implementation Timeline

The amendments to the Tariff Act will take effect as follows:

• For goods originating in China, the changes apply immediately upon the bill's enactment, with some exceptions for goods already in transit.
• For goods from all other countries, the new rules will take effect after 120 days following enactment.

Impact on Enforcement

The bill emphasizes the need for effective enforcement of U.S. import laws. The Secretary will be tasked with developing regulations that ensure proper penalties and liabilities are established, aiming to deter any unlawful or fraudulent activities related to importation. This includes improving documentation requirements to ensure accuracy and compliance from entities importing goods.

Relevant Companies

• AAPL - Apple Inc.: As a major importer of electronic goods and components, Apple may face increased costs due to tariffs on products that were previously exempt under the de minimis rule.
• AMZN - Amazon.com, Inc.: Amazon could see logistical changes and increased costs for third-party sellers who import low-value goods, which may affect its marketplace dynamics.
• WMT - Walmart Inc.: As a large retailer with extensive imports, Walmart might encounter higher import costs and operational changes as a result of the elimination of de minimis treatment.