TEXTILES.ORG
Sen. Sherrod Brown (D-OH) joined manufacturers, retailers, law enforcement and workers at MMI Textiles in Brooklyn, Ohio, on August 2, to push for the Biden Administration to close a loophole that foreign countries like China exploit to avoid paying duties and fees they owe, and that fentanyl traffickers exploit to evade customs inspections. Brown introduced bipartisan legislation to address the problem and has repeatedly encouraged the president to take executive action to close the loophole.
“We know what a problem unfair foreign competition is for Ohio companies, particularly from China. Tariffs have been one way to counter this and level the playing field for American manufacturing, but this de minimis loophole is yet another way for China to cheat,” says Brown. “And because these packages enter the U.S. with minimal inspection, drug traffickers are also exploiting the de minimis loophole to send deadly drugs like fentanyl into our country without any detection.”
Right now, packages under $800 in valuation are exempted from U.S. duties, taxes and fees, and are allowed to enter the country with little or no inspections. The number of packages using this loophole to avoid duties has soared recently to more than three million packages per day. Foreign competitors will often split large shipments into many small packages to cheat the rules and evade the duties they owe, gaining an unfair competitive advantage. These shipments often include counterfeit items and items made with slave labor. Drug traffickers, aware of this glaring loophole, ship deadly drugs, like fentanyl, in these small packages to evade detection. Earlier this year, Sen. Brown and Sen. Rick Scott (R-FL) sent a letter to the president urging him to use his executive authorities under the Tariff Act of 1930 to end the abuse of the de minimis loophole.
“The de minimis loophole continues to wreak havoc on an already fragile textile industry due to fast fashion imports that get duty-free access to the USA. Our US textile industry is vital for the country in order to provide an industrial base to the military and [Protective Personal Equipment] PPE sectors,” says Amy Bircher, CEO of MMI Textiles. “Sherrod Brown does hard work to make sure American manufacturing is prioritized. Our industry is resilient, and we have survived a litany of changes over the past 4 decades, but we are rewarding China at the expense of our nation’s manufacturing jobs.”
“For federal law enforcement officers like me who work at the ports, it is incredibly frustrating to watch helplessly as millions of international packages that could contain fentanyl and other contraband evade inspection every day because of a loophole in the law. If we had the authority and additional staff to inspect more of them, we would undoubtedly seize more illegal drugs like fentanyl that are destroying families and communities and collect more of the tariffs that foreign companies owe on their imports. The CBP Officers I represent through the National Treasury Employees Union strongly support the efforts by Sen. Brown and others to close the loophole and allow me and my colleagues to do our job to protect Americans from deadly substances and American companies from unfair competition,” says Heidi Tien, President of National Treasury Employees Union Chapter 155.
Brown has long been a leader in pushing to strengthen U.S. trade enforcement, including working to close this massive loophole. Last September, he called on the president to shield the American textile and apparel industry from unfair trade practices. In June, he introduced the bipartisan Import Security and Fairness Act, a legislative solution to close the de minimis loophole. Brown’s legislation would ensure low-value shipments from non-market economies, such as China, are no longer exempt from paying any duties, taxes or fees to the U.S. government.