H.R.1840 - Closing the De Minimis Loophole Act (119th Congress)
Summary
H.R.1840, the "Closing the De Minimis Loophole Act," aims to eliminate de minimis treatment under the Tariff Act of 1930. This treatment currently allows for the entry of goods valued under a certain threshold (de minimis) to enter the U.S. without duties or taxes. The bill phases out this treatment, particularly targeting goods originating from China.
The Act mandates rulemaking by the Secretary of the Treasury to implement the termination of these privileges. It also requires enhanced data and entry procedures for informal modes of entry, ensuring better enforcement of U.S. laws and accurate collection of duties.
Finally, the Act addresses international postal agreements to ensure consistency in the treatment of shipments entering the U.S. through the postal network, aligning them with other shipments.
Expected Effects
The primary effect of this bill will be increased costs for certain imported goods, especially those from China, as they will now be subject to duties and taxes. This could lead to higher prices for consumers and businesses that rely on these imports.
Additionally, the bill will likely increase the workload for customs officials and require businesses to adapt to new entry procedures and data requirements. There will be a shift in competitiveness as some importers may be disadvantaged.
The bill aims to generate more revenue for the government through increased tariff collection and reduce the competitive advantage currently held by companies utilizing the de minimis loophole.
Potential Benefits
- Increased government revenue through tariffs.
- Potentially leveling the playing field for domestic businesses that compete with imports.
- Enhanced enforcement of U.S. laws and regulations related to imports.
- Greater scrutiny of goods entering the country, potentially improving safety and security.
- May incentivize companies to shift production to countries other than China, diversifying supply chains.
Potential Disadvantages
- Increased costs for consumers due to tariffs on previously duty-free goods.
- Potential disruptions to supply chains, especially for businesses relying on de minimis shipments.
- Increased administrative burden and compliance costs for businesses importing goods.
- Possible retaliatory tariffs from other countries, impacting U.S. exports.
- Disproportionate impact on small businesses and individual consumers who rely on low-cost imports.
Constitutional Alignment
The bill aligns with Congress's power to regulate commerce with foreign nations, as granted by Article I, Section 8 of the Constitution. This section explicitly grants Congress the power to "lay and collect Taxes, Duties, Imposts and Excises" and to "regulate Commerce with foreign Nations."
The Act does not appear to infringe on any specific constitutional rights or protections. The rulemaking process mandated by the bill provides an opportunity for public input and ensures due process in the implementation of the new regulations.
However, the potential for increased costs to consumers and businesses could raise concerns about the general welfare, although this is a broad constitutional principle rather than a specific right.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).