Brown and Scott urge Biden to scrap $800 threshold on duty-free imports, citing unfair competition for U.S. manufacturers

Two U.S. senators, Sherrod Brown (D-Ohio) and Rick Scott (R-Fla.), are calling on President Joe Biden to take executive action to eliminate the duty-free treatment for shipments under $800, arguing that it harms American manufacturers and retailers. The senators have raised concerns about the surge in tariff-free packages entering the U.S., particularly from China, which they say undermines local industries by giving companies an unfair advantage.

The current U.S. trade law allows imports below a certain value, specifically $800 per day per person, to enter without tariffs under the “de minimis” rule. This has led to a rise in small shipments, many of which are retail products bought online. Lawmakers have highlighted the impact of this rule, especially from companies like Temu, Shein, and AliExpress, accusing them of benefiting from duty-free treatment that they claim is unfairly advantageous.

Brown and Scott argue that these tariff-free imports are threatening American jobs and businesses, particularly in the retail and manufacturing sectors. They have pointed out that such practices, including forced labour, are commonly associated with Chinese production, further damaging U.S. economic interests. In their letter to Biden, the senators state, “This out-of-control problem impacts the safety and livelihoods of Americans, outsourcing not only our manufacturing but also our retail sectors to China.”

The decision to raise the duty-free threshold from $200 to $800 in 2016 has led to a dramatic rise in the number of shipments, with the number of “de minimis” packages surging from 220 million in 2016 to 685 million by 2022. This increase in shipments, the senators argue, is contributing to the hollowing out of American manufacturing.

While the policy has been supported by many in the business community for promoting quick commerce and reducing costs for consumers, opponents of the current system warn that such imports are detrimental to U.S. industries. John Pickel, from the National Foreign Trade Council, expressed concerns that imposing a stricter system as proposed by the senators would slow down shipments and raise costs for consumers. Pickel suggests that the real driver behind the demand for duty-free imports is consumer desire for faster delivery and lower transaction fees, not the $800 threshold itself.

For now, the White House has not responded to the senators’ call to action, but their proposal has sparked a national conversation about the balance between facilitating trade and protecting domestic industries.