In the Biden Administration’s final week, U.S. Customs and Border Protection (“CBP”) released two notices of proposed rulemaking that would limit how companies use simplified and duty-free de minimis entry procedures for import shipments valued at less than $800. On January 14, “Entry of Low-Value Shipments” was published in the Federal Register. In that rule, CBP proposes to combine its existing Section 321 Data Pilot and Entry Type 86 Test into a single, new “enhanced entry process” for low-value shipments. The new process would require additional data to be transmitted in advice of arrival of these shipments (such as 10-digit harmonized tariff classification), to help CBP to target high-risk shipments, especially those containing illicit fentanyl.
- On January 17, CBP announced “Trade and National Security Actions and Low-Value Shipments,” via which CBP proposes to prohibit the use of de minimis entry procedures for goods subject to trade or national security actions, including goods subject to Section 301, section 232, and section 201 tariffs (existing regulations already prohibit de minimis entry of goods subject to antidumping or countervailing duty or to quota or other quantitative restrictions). This proposed rule would, according to CBP, impact more than 75 percent of current de minimis shipments, leading to an average of 21.2 percent duty liability. The proposed rule would therefore result in as much as $7.8 billion in new tariff revenue to CBP.
While President-elect Trump has said he will undo most of the outgoing Biden Administration’s final actions, CBP may have been working a similar rule under the prior Trump Administration, similar proposals to curtail the use of de minimis entry procedure shave been introduced in Congress, and the President-elect has been emphatically supportive of using additional import tariffs to raise revenue. Thus, it remains to be seen whether CBP will finalize these rules under the new presidential administration.