The original 1930 Tariff Act imposed customs duties on almost all imports. However, with the expansion of global trade, the de minimis rule was introduced to establish a threshold for duty-free imports. This threshold progressively increased over the years, reaching $200 in 1994 under the Customs Modernization Act.  In 2015, the Obama Administration further raised the de minimis threshold to $800, aligning it with the NAFTA agreement (now the USMCA). This adjustment aimed to improve efficiency and reduce costs by allowing customs authorities to focus on high-value imports, expediting the processing of low-value packages and reducing congestion at U.S. entry points.

On June 15, 2023, Senators Sherrod Brown and Marco Rubio, and Representatives Neal Dunn and Earl Blumenauer, reintroduced the Import Security and Fairness Act (H.R. 4818), which had died in Congress in 2022.  The reintroduced bill proposes amendments to Section 231 of the US Tariff Act. These legislators joined groups like the American Apparel & Footwear Association and the Ship Safe Coalition in criticizing Section 231’s de minimis exemption for imports from countries whose trade practices have met with criticism from U.S. industries.  In 2021, $771 million of imports entered the United States without customs duties under the de minimis exemption, up from $220 million in 2016.

The exponential growth of Chinese e-commerce companies like Shein and Temu has especially raised concerns about the de minimis provision being used as a loophole, providing an unfair advantage for foreign imports.  Critics argue that this places American companies, especially those importing products in bulk for warehousing and subsequent shipment to customers, at a disadvantage. Additionally, shipments falling under the de minimis rule are perceived as potential channels for goods produced through forced labor to enter the United States.

While previous modifications aimed to foster economic growth, recent legislative proposals, like the Import Security and Fairness Act, focus on security concerns and trade reciprocity.  The proposed Import Security and Fairness Act targets goods from states identified on the United States Trade Representative’s Special 301 Priority Watch List as failing to protect U.S. intellectual property adequately.  As of June 2023, only China and Russia met these criteria.  If enacted, the Act would eliminate the de minimis exemption for small goods from these countries, requiring a formal importation process.  In addition, U.S. Customs & Border Protection would be required to collect more detailed information on small value import shipments.