Grassley, Wyden: USMCA bill should honor current de minimis

The leaders of the Senate Finance Committee this week in a letter urged U.S. Trade Representative Robert Lighthizer to maintain the current $800 de minimis level in forthcoming USMCA implementing legislation, after a USMCA footnote stoked concern.    After the Trump administration notified Congress last month of required changes to U.S. law to implement the U.S.-Mexico-Canada Agreement (USMCA), Senate Finance Committee leaders on Wednesday urged U.S. Trade Representative Robert Lighthizer against seeking to reduce the United States’ de minimis threshold to levels reciprocal with trading partners like Canada and Mexico.
   In a letter released Thursday, committee Chairman Chuck Grassley, R-Iowa, and ranking member Ron Wyden, D-Ore., expressed specific concern regarding language in the description of legal changes stating the executive branch may change the Trade Facilitation and Trade Enforcement Act (TFTEA) to implement USMCA Article 7.8.1.
   That USMCA article states that the U.S. de minimis level is to be at least $800, though a footnote to Article 7.8.1 states that a USMCA party may institute a de minimis level reciprocal with another party’s lower de minimis level.
   USMCA sets Mexico’s de minimis level at a fixed amount of $117 and Canada’s de minimis level at a fixed amount of $150.
   Along with the USMCA footnote, existing statute (19 U.S. Code 1321) allows the government to eliminate de minimis entry benefits if necessary to protect U.S. revenue or prevent unlawful imports.
   Several major national trade associations signed onto a Nov. 6 letter to Lighthizer urging the Trump administration to strike the USMCA footnote, asserting, among other things, that the $800 level benefits U.S. businesses and consumers through offering things like more rapid border clearance and reduced burdens of importing low-value goods.
   “In 2016, Congress raised the de minimis threshold unilaterally to the current level in the bipartisan Trade Facilitation and Trade Enforcement Act (TFTEA), so our position is clear,” Grassley and Wyden wrote. “This change enjoys wide, bipartisan support throughout the e-commerce landscape. It benefits thousands of American small businesses across sectors, as well as our manufacturers that rely on imported low-value inputs for the production of U.S. exports.”
   The Office of the U.S. Trade Representative didn’t respond to a request for comment.
   Since the 2016 enactment of TFTEA raised the de minimis level from $200 to $800, members of the trade community have expressed concerns about an increase in apparent fraudulent shipments and a U.S. Customs and Border Protection inspection environment stretched thin amid an overall increase in low-value shipments.
   “Chairman Grassley is aware of and takes seriously those concerns and has been in contact with stakeholders and CBP,” a committee spokesperson said in an email. “Chairman Grassley has been and will continue to conduct rigorous oversight of CBP as it is within the jurisdiction of the Senate Finance Committee.”