On January 17, 2025, Customs and Border Protection (CBP) announced a Notice of Proposed Rulemaking (NPRM) intended to tighten the de minimis duty exemption for certain low-value shipments entering the United States. Under the proposed rule, merchandise subject to specific trade and national security actions would no longer qualify for the de minimis exemption and certain shipments claiming this exemption will be required to provide the 10-digit Harmonized Tariff Schedule of the United States (HTSUS) classification for the imported low-value merchandise.
The NPRM focuses on national security tariffs imposed under Section 232 of the Trade Expansion Act of 1962, safeguard tariffs imposed under Section 201 of the Trade Act of 1974, and unfair trade tariffs imposed under Section 301 of the Trade Act of 1974. The proposed changes would make certain products ineligible for the de minimis exemption, which currently allows goods valued at $800 or less to enter the country without paying duties or certain taxes. Importers of such goods would have to pay both the standard duties and any additional duties imposed pursuant to trade and national security actions. CBP estimates that 77 percent of shipments in fiscal year 2023 claiming the administrative exemption would have been assessed additional duties under these actions had they not claimed the exemption. CBP in the NPRM notes that merchandise subject to an absolute or tariff-rate quota, whether the quota is open or closed, and merchandise subject to antidumping (AD) and countervailing duties (CVD) are not eligible for this exemption. In requiring the 10-digit HTSUS classification, CBP states that the proposed rule “is likely to improve CBP’s ability to accurately identify the contents of a shipment claiming the administrative exemption even if it does not contain goods subject to an ad valorem tariff as a result of a trade or national security action.”
CBP notes that “over the last 10 years, the number of shipments entering the United States claiming the administrative exemption has increased significantly, from approximately 139 million a year to over one billion a year”, and that this significant increase has created challenges to CBP’s “effective enforcement of U.S. trade laws, health and safety requirements, intellectual property rights, and consumer protection rules.” Low-value shipments have become an avenue to import illicit goods and have impacted the enforcement of the identified trade and national security actions. This NPRM would exclude merchandise subject to ad valorem tariffs imposed under Section 232, 201, or 301 from eligibility for the exemption under Section 321(a)(2)(C) of the Tariff Act of 1930, as amended. According to CBP, this proposed rule is consistent with the purpose of Section 321(a) and is necessary to protect tariff revenue since the duties collected under these national security and trade actions are typically significantly higher than the regular rates of duties that would apply under the exemption. It would also serve to prevent unlawful importations related to health and safety requirements, intellectual property rights, and consumer protection rules.
The NPRM includes international mail in the scope, but CBP notes that unique considerations are necessary for any applicability of these restrictions and requirements to be placed on such mail shipments. The U.S. Postal Service (USPS) has committed to provide comments as part of the rulemaking record, and CBP invites public comment on this topic to determine whether there are sufficient reasons why postal shipments can and should be treated differently. This aspect of the NPRM will be addressed as the rulemaking proceeds.
CBP is requesting public comments on this NPRM until March 24, 2025. Comment must be submitted via the Federal eRulemaking Portal at https://www.regulations.gov under Docket No. USCBP–2025–0003.
See also Thompson Hine Update of January 14, 2025, for a separate but related rulemaking pertaining to other proposed modifications to the process for entry of certain low-value (i.e., de minimis) shipments into the United States.