This bill amends the Tariff Act of 1930 to prevent duty-free treatment for goods from countries subject to trade restrictions, especially those under Section 301 of the Trade Act of 1974, and imposes penalties for violations. It also requires detailed electronic reporting for goods subject to Section 301 to U.S. Customs and Border Protection.
Gregory Murphy
Representative
NC-3
The "End China's De Minimis Abuse Act" amends the Tariff Act of 1930 to prevent duty-free treatment for goods that circumvent trade restrictions or are split into multiple shipments to avoid duties. It mandates electronic filing of tariff classifications for goods from countries subject to Section 301 of the Trade Act of 1974 and establishes penalties for violations. These changes aim to close loopholes that allow certain imports to bypass tariffs and trade regulations. The act will take effect 30 days after enactment.
New Bill Cracks Down on Duty-Free Loophole: No More Splitting Orders to Avoid Tariffs, Starting 30 Days Post-Enactment
The "End China's De Minimis Abuse Act" directly targets a loophole in import rules that's been letting some companies dodge tariffs. The core change? It blocks businesses from splitting up a single order into multiple smaller shipments to sneak under the duty-free limit. This is a direct hit on a tactic that's been used to avoid paying what's due on imports, especially from countries facing trade restrictions under Section 301 of the 1974 Trade Act (think China, for example).
Closing the Floodgates
This bill doesn't mess around. It amends the Tariff Act of 1930, saying "no way" to duty-free status for goods if they're part of an order that's been chopped up just to avoid tariffs. Section 2 of the bill lays it all out, specifically targeting articles that fall under existing trade restrictions. It calls out Subtitle A or B of Title VII of the Tariff Act, and Sections 201, 232, and 301 of other trade acts. What does this mean for a business owner or a regular consumer? If you're importing goods that are already under scrutiny, you can't get around tariffs by breaking up your order.
Real-World Impact
Imagine a small business, Main Street Furniture, that makes wooden chairs right here in the USA. They've been struggling to compete with cheaper imports from a country subject to Section 301 tariffs. Some importers have been splitting large orders into tiny shipments to qualify for duty-free treatment, undercutting Main Street Furniture's prices. This bill levels the playing field. Now, those importers will have to pay the same tariffs as everyone else, making it a fairer fight for Main Street Furniture. The U.S. Treasury will likely see more revenue from these collected tariffs, too.
Getting Down to the Details
This bill also cranks up the data requirements. If you're importing from a country hit by Section 301, you now must provide the full 10-digit Harmonized Tariff Schedule classification electronically to U.S. Customs and Border Protection (CBP). That's super specific, and it's designed to make sure everything is classified correctly, leaving less wiggle room for dodging tariffs. Mess up, and you're looking at a $5,000 fine for the first violation, jumping to $10,000 for each one after that (as per Section 2 of the bill). These changes kick in fast – just 30 days after the Act is enacted. While this bill increases transparency, it also means businesses will need to be extra diligent with their paperwork, and CBP is going to be busier than ever.