S. 1867: Closing the De Minimis Loophole Act

This bill, known as the Closing the De Minimis Loophole Act, aims to amend certain provisions of the Tariff Act of 1930 regarding how goods are imported into the United States, specifically targeting what's known as the "de minimis" threshold. The current de minimis rule allows certain low-value imports to enter the U.S. without being subject to import duties and taxes.

Key Provisions

• Elimination of De Minimis Treatment: The bill proposes to eliminate the de minimis exception for imports from specific countries, starting with articles originating in China. This means that goods valued at $800 or less that previously could enter duty-free will now be subject to tariffs.
• Delayed Applicability Dates: The new rules would take immediate effect for Chinese goods upon the law's enactment. However, for goods from other countries, the new rules will apply 120 days after the law is enacted.
• Rulemaking Requirement: The bill requires the Secretary of the Treasury to undertake a rulemaking process within 120 days after the enactment. This process will ensure that the termination of the de minimis treatment is implemented consistently and that proper procedures are in place for the entry of goods.
• Entry Procedures and Compliance: The Secretary will also need to establish adequate data requirements and entry procedures to ensure efficient collection of duties and to prevent unlawful activities. This includes potentially requiring more detailed information about imported goods to improve monitoring and compliance.
• International Postal Agreements: The bill mandates that shipments sent through international postal services that would have benefited from the de minimis treatment before the law's enactment must follow new procedures, ensuring consistent treatment between postal and other shipments.

Implications

By closing this loophole, the bill is expected to increase the number of low-value goods that are subject to tariffs, potentially raising revenue for the federal government while also impacting how businesses import goods into the United States. This change may also influence pricing and availability of certain products for consumers.

Relevant Companies

• AAPL (Apple Inc.): Apple could be affected as it imports various accessories and components that could fall under the de minimis rule.
• AMZN (Amazon.com, Inc.): Amazon could face increased costs for low-value items sold through its platform that were previously exempt from duties.
• WMT (Walmart Inc.): Walmart imports a significant amount of low-cost goods which could now be subject to customs duties.