The U.S. Customs and Border Protection (CBP) has announced a Notice of Proposed Rulemaking (NPRM) to tighten the de minimis duty exemption for certain low-value shipments entering the U.S.

CBP said the proposed changes would "make certain products ineligible for the exemption, which currently allows goods valued at US$800 or less to enter the country without paying duties or certain taxes."

It added that the proposed Trade and National Security Actions for Low-Value Shipments rulemaking protects intellectual property rights, consumer health and safety protections, and closes enforcement gaps while safeguarding American businesses and workers from unfair trade practices.

"Both the volume and combined worth of low-value, or de minimis, shipments to the United States have risen significantly over the past ten years," said  Secretary of Homeland Security Alejandro N. Mayorkas.

"The exemption of these goods from duties or taxes has undermined American businesses and workers and flooded our ports of entry with foreign-made products, making CBP's vital work screening these goods for security risks more difficult," he added.

Over the last 10 years, the number of shipments entering the United States claiming the de minimis administrative exemption increased by more than 600% from approximately 139 million a year in Fiscal Year (FY) 2015 to over one billion a year by FY 2023.

The CBP announcement noted that during Fiscal Year 2024, de minimis shipments rose again to over 1.36 billion — and the agency noted that this exponential increase has created challenges for CBP's effective enforcement of U.S. trade laws, health and safety requirements, intellectual property rights, and consumer protection rules.

Duty exemption for specified low-value shipments

"Under the proposed new rule, merchandise subject to specific trade and national security actions would no longer qualify for the de minimis exemption," CBP said, adding that certain shipments claiming this exemption will be required to provide the 10-digit Harmonized Tariff Schedule of the United States (HTSUS) classification for the imported low-value merchandise.

Specifically, the Trade and National Security Actions for Low-Value Shipments NPRM focuses on national security tariffs imposed under Section 232 of the Trade Expansion Act of 1962, safeguard tariffs imposed under Section 201 of the Trade Act of 1974, and unfair trade tariffs imposed under Section 301 of the Trade Act of 1974.

The NPRM proposes to exclude merchandise subject to tariffs imposed under Section 232, Section 201, and Section 301 from eligibility for duty-free treatment under the de minimis exemption.

The CBP noted that currently, merchandise subject to absolute or tariff-rate quota, whether the quota is open or closed, and merchandise subject to antidumping and countervailing duties are not eligible for the de minimis administrative exemption, but goods subject to Section 201, 232, and 301 tariffs may still claim the exemption.

The proposed ELVS rule will enhance supply chain visibility and enable CBP to better interdict illegal shipments across U.S. ports of entry.

The tightening of de minimis rules has been tagged to aim specifically at Chinese e-commerce companies like Shein and TEMU, which have become increasingly popular among online shoppers in the United States.

"We cannot let Chinese-founded e-commerce platforms gain an unfair trade advantage while American businesses play by the rules," said National Economic Advisor Lael Brainard.

The CBP noted that low-value e-commerce shipments pose the same health, safety, and security risks as higher-value shipments. Of particular concern are the large volume of such importations daily and the more limited data that CBP receives regarding low-value shipments, which make it increasingly difficult for CBP to target and block illicit synthetic drugs such as fentanyl and synthetic drug raw materials and related manufacturing equipment from entering the country.

"The proposed rule will enable CBP to further protect the revenue of the United States and prevent unfair or discriminatory trade practices from harming U.S. national and economic security," the CBP said.

It added that members of the public will have 60 days to comment on the proposed rulemaking.