There have been several noteworthy trade bills hitting the congressional floor recently, including the reinstatement of the Generalized System of Preferences and the stricter regulations to reform de minimis. Each bill could have intricate implications and potential ramifications on global commerce—and your business.
Renewal of the Generalized System of Preferences (GSP)
Introduced on April 15, 2024, and approved by the House Ways and Means Committee on April 19, 2024, the Generalized System of Preferences Reform Act would renew GSP through December 31, 2030, and be made retroactive to its December 31, 2020, expiration date.
The main takeaways from the bill include:
- Permanently bans China from GSP
- Raises the rule-of-origin threshold from 35 percent to 50 percent
- Increases competitive limitations from $215 million to $500 million
- Removes countries that have increasing economic and military ties to China
- Establishes new country eligibility criteria specific to agricultural exports, digital trade, and labor and environmental issues
Heightened scrutiny on de minimis eligibility
The focus on de minimis has been at the forefront for some time now, and the recently introduced End China’s De Minimis Abuse Act adjusts eligibility for those shipments valued at under $800 entering into the United States duty free.
The bill’s reform includes the following provisions:
- Prohibits goods subject to antidumping or countervailing duties from using the program
- Prohibits goods subject to enforcement actions (e.g., Section 301, Section 232, and Section 201 tariff measures) from using the program
- Requires a 10-digit Harmonized Tariff Schedule of the United States (HTSUS) classification for countries subject to Section 301 tariffs
- Makes violators liable for civil penalties of $5,000 for the first violation, and $10,000 for each subsequent violation
House Ways and Means subcommittee member, Earl Blumenauer, put forth an amendment to this bill, which would end de minimis treatment for all shipments from China.
A further focus on forced labor
Also introduced on April 15, 2024, the Stop China’s Exploitation of Congolese Children and Adult Forced Labor Through Cobalt Mining Act would require the Forced Labor Enforcement Task Force to investigate forced and child labor claims on the cobalt industry in the Democratic Republic of Congo (DRC).
It also requires blocking imports of any cobalt found to be mined or processed with the use of forced labor. As cobalt is an essential component of most lithium-ion batteries—components of smartphones, laptops, and electric vehicles—it’s worth noting that Chinese entities reportedly have ownership stakes of 15 of the DRC’s 19 cobalt mines.
What to expect next?
All these bills—and several others—now head to the House floor for consideration. Chamber leadership, however, has made no indication on whether any of these measures will be taken, nor provided a timeframe. C.H. Robinson will, of course, continue to monitor these newly emerging developments as they occur and communicate any updates proactively.
Stay informed
Developments in customs and trade continue to evolve—stay informed to be prepared:
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