Senate Finance Chairman Ron Wyden (D-OR) recently introduced a bill that formalizes the legislation he released in August, the Fighting Illicit Goods, Helping Trustworthy Importers, and Netting Gains (FIGHTING) for America Act. The FIGHTING for America Act would remove de minimis treatment for goods impacted by the Generalized System of Preferences (GSP) program, as well as goods subject to Sections 232, 201, and 301.

Currently, the de minimis exemption under Section 321 allows goods with an aggregate value under $800 to enter the U.S. duty-free and via an expedited process. Senator Wyden’s proposed FIGHTING for America Act would remove this exemption for items categorized as “import sensitive” and ineligible for duty-free treatment under GSP, as well as items subject to antidumping duties, countervailing duties, and tariffs under Sections 232, 301, and 201. Notably, the legislation would restrict de minimis treatment for textile and apparel imports, in an aim to target China’s growing e-commerce industry.

In recent years, there has been a significant increase in the volume of de minimis shipments processed by U.S. Customs and Border Protection (CBP), leading to concerns about the regulation and reporting of shipments entering the U.S. CBP currently processes approximately 4 million de minimis shipments per day, compared to 2.8 million shipments per day in the first quarter of 2023. A major factor in the increase has been the rise of de minimis shipments coming from China-based e-commerce platforms in the textile and apparel sectors.

In September, the Biden administration issued a statement suggesting several changes in response to the influx of de minimis shipments, such as calling on Congress to pass de minimis reform and proposing rules that would make imports subject to tariffs under Sections 232, 201, and 301 ineligible for de minimis treatment. There has been strong bipartisan support in Congress for de minimis reform, with several bills proposing changes to the de minimis exemption being introduced in this past year.

The elimination of de minimis treatment would likely affect companies that leverage direct-to-consumer commerce, and impact pre-existing supply chains and product prices if passed.