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Volume XII, Number 146

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Bill Proposes Elimination Of Duty Exemption For Low-Value Imports From China And Other Countries

A new bill – the Import Security and Fairness Act – introduced in the U.S. House by Rep. Earl Blumenauer, chair of the House Ways and Means Trade Subcommittee, would require all imports from non-market economies, such as China and Vietnam, as well as countries on the United States’ “intellectual property watch list,” to 1) go through a formal customs entry process and 2) pay tariffs, regardless of the value of the imported items.  

Current U.S. law permits entries worth less than $800 to avoid formal customs clearance and payment of duties.

In a press release accompanying the proposed legislation, Rep. Blumenauer noted the aim of the act is to respond to the skyrocketing volume of small-value packages coming into the U.S. In the view of the bill’s supporters, exporters in countries such as China “exploit” the customs entry de minimis provision by lowering the price of their merchandise through the use of forced labor or intellectual property theft, and by exporting large quantities of packages valued at less than $800, thereby avoiding tariffs and customs scrutiny.  

The act, if passed by the Senate and signed into law, would require packages currently benefitting from tariff exemption and expedited clearance – because such packages are valued at or less than $800 – to go back into the formal Customs and Border Protection (CBP) clearance process, forcing importers of such imported goods to again pay tariffs.  

Opponents of the legislation claim that, if passed, the act would increase prices for consumers and domestic manufacturers who at times procure imported goods valued at less than $800. The opponents also argue that the legislation would violate the U.S. commitments to the World Trade Organization (WTO), particularly the “Most Favored Nation” clause, which restricts the ability of member countries to discriminate among member countries in the application of tariffs – except under narrowly defined circumstances.  

In introducing the Import Security and Fairness Act, Rep. Blumenauer indicated that he hoped to move the bill quickly, perhaps as part of a massive China-related trade bill that is pending before the House. 

Companies that import either inputs or finished merchandise valued at or less than $800, particularly those that operate or utilize e-commerce platforms, should consider closely monitoring this act and any related legislation, as passage would require the payment of additional duties and would trigger new customs clearance obligations. In addition, courier services that tend to handle small-value package delivery should be attentive to any impacts of such legislation that would complicate their import businesses.

© 2022 BARNES & THORNBURG LLPNational Law Review, Volume XII, Number 26
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About this Author

David M. Spooner, Barnes Thornburg Law Firm, Washington DC, Corporate and Finance Law Attorney
Partner

David M. Spooner is a partner in the Corporate Department and Co-Chair of the International Trade Practice Group. Mr. Spooner represents governments, trade associations, and corporate clients on international trade matters, including trade remedies, trade policy and customs issues. He uses his past experience as a high-level political appointee in the Executive Branch and on Capitol Hill to assist clients with their advocacy efforts before both branches of government, as well as before foreign governments.

Prior to entering private practice, Mr...

202-371-6377
Linda M. Weinberg International trade lawyer Barnes Thornburg
Partner

Linda Weinberg provides practical advice to business and institutional clients on international trade law, including export controls, foreign assets control and customs. She works regularly with the U.S. and foreign government agencies that regulate international trade to help clients realize their distinct objectives surrounding their global commerce initiatives.

Co-chair of the firm’s International Trade practice group, Linda advises and represents clients on commodity jurisdiction, export classification, licensing, technical assistance agreements, and enforcement related to...

202-408-6902
Clinton Yu, Barnes Thornburg Law Firm, Washington DC, Corporate Law Attorney
Attorney

Clinton K. Yu is an associate in the Washington, D.C., office of Barnes & Thornburg LLP. He is a member of the firm’s Corporate Department and the International Trade and Federal Procurement practice groups. Mr. Yu has a wide range of experience on customs and imports, export controls and economic sanctions, and trade remedy matters, in addition to experience on federal procurement and government contract matters. Mr. Yu has experience representing clients in various industries such as energy, food and agriculture, aerospace and defense, electronics and consumer...

202-371-6376
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