The recent proposed changes to the de minimis rule represent a significant shift in U.S. trade policy, with far-reaching implications for shippers. De minimis allows low-value shipments to enter the United States duty-free. These changes are aimed at tightening the exemption criteria to better protect American businesses and enhance national security.
By understanding the new requirements and proactively adjusting their strategies, businesses can better navigate the evolving trade landscape and continue to thrive in a more regulated environment.
Overview of the proposed changes
The de minimis rule currently permits goods valued at $800 or less to enter the United States without paying duties or certain taxes. However, the U.S. Customs and Border Protection (CBP) Notice of Proposed Rulemaking (NPRM) seeks to modify this exemption by excluding certain low-value shipments from the de minimis treatment. Key aspects of the proposed changes include:
1. Exclusion of certain goods
Merchandise subject to specific trade and national security actions, such as tariffs under Sections 201, 232, and 301, will no longer qualify for the de minimis exemption.
2. Enhanced entry requirements
Shippers will be required to provide a 10-digit Harmonized Tariff Schedule of the United States (HTSUS) classification for shipments claiming the de minimis exemption.
3. New entry processes
The NPRM introduces a new "enhanced entry process" for low-value shipments, which includes the submission of advance electronic data.
Implications for shippers
The proposed changes are expected to have a significant impact on shippers, particularly those relying on the de minimis exemption for low-value, high-volume shipments. Key implications include:
1. Increased costs
Shippers of goods previously exempt under the de minimis rule will now face additional duties and fees, potentially increasing the overall cost of importing these products.
2. Heightened compliance requirements
The requirement to provide detailed tariff classifications and advance electronic data will necessitate more rigorous documentation and compliance efforts.
3. Supply chain adjustments
Businesses may need to reassess their supply chains and sourcing strategies to mitigate the impact of the new regulations. This could involve exploring alternative suppliers or adjusting order quantities to optimize costs.
How shippers can prepare
To navigate the upcoming changes, shippers should consider the following steps:
1. Review and update compliance procedures
Ensure that you have a strong, resilient customs and trade compliance program to navigate new requirements.
2. Engage with trade experts
Connect with global shipping experts to understand the full implications of the proposed changes and develop strategies to minimize their impact.
3. Monitor regulatory developments
Stay informed about the progress of the NPRM and any additional guidance issued by the CBP. Participating in public comment periods can also provide an opportunity to voice concerns and seek clarifications.
4. Evaluate supply chain alternatives
Consider diversifying your supplier base to reduce reliance on goods subject to the new tariffs. This may involve sourcing from countries not affected by Sections 201, 232, and 301 tariffs.
Public participation
The proposed changes to the de minimis rule by CBP aim to strengthen trade enforcement, addressing concerns over unfair trade practices and national security. CBP is requesting stakeholder input on both proposals. The public comment periods are open until March 17, 2025, for the Jan. 14 NPRM and March 24, 2025, for the Jan. 21 NPRM. This is a crucial time for stakeholders to engage with the regulatory process and ensure their perspectives are considered in the final rulemaking.
Stay informed
Developments in customs and trade continue to evolve—stay informed to be prepared:
- Connect with our trade policy experts
- View our Trade & Tariff Insights
- Subscribe to our Client Advisories
