The EIA Stands Strong for American Businesses and Consumers in Comments on Proposed Tariff Rulemaking
The Ecommerce Innovation Alliance (EIA), the leading trade association dedicated to championing the interests of U.S.-based small and mid-sized ecommerce businesses, today announced the filing of comprehensive comments in response to the recent Notice of Proposed Rulemaking (NPRM) issued by U.S. Customs and Border Protection (CBP) concerning trade and national security actions and low-value shipments. In its detailed submission, the EIA vigorously defends the crucial role of the de minimis exemption in fostering a thriving ecommerce ecosystem and strongly cautions against proposals that would inflict significant harm on American small businesses and consumers.
As the voice of innovation and growth within the ecommerce sector, the EIA understands firsthand the immense benefits that the current de minimis threshold of $800 provides to its members – the hardworking entrepreneurs, stay-at-home parents, and local businesses that form the backbone of online retail in America. These are not large corporations exploiting loopholes, but rather prudent businesses that have strategically leveraged the de minimis provision to offer high-quality goods at competitive prices, thereby creating valuable jobs in communities across the nation.
In its comments to CBP, the EIA makes a compelling case against the elimination or substantial modification of the de minimis exemption, highlighting the profoundly negative consequences for both ecommerce businesses and the American consumer. Our core arguments underscore the following critical points:
Devastating Financial Blow to Small and Mid-Sized Ecommerce Businesses: The removal of the de minimis threshold would trigger a substantial increase in costs for small and mid-sized ecommerce businesses that rely on imported goods valued under $800. Currently, these businesses can import such goods without incurring duties and certain administrative fees. Eliminating this exemption would subject these imports to standard tariff rates, merchandise processing fees, and potentially customs broker fees. For businesses operating on tight margins, these added expenses could be the difference between success and closure, potentially leading to significant job losses across the country. The EIA emphasizes that these businesses often lack the capital reserves to absorb such tariff and fee shocks, forcing them to either raise prices for consumers or cease operations entirely.
Crippling Administrative Burdens and Regulatory Complexities: The EIA points out that the de minimis exemption has streamlined customs procedures for low-value shipments, reducing documentation requirements. Without this exemption, small and mid-sized businesses would face a significant increase in administrative burdens, potentially requiring them to navigate complex import processes and incur the added expense of customs brokers for each low-value shipment. These businesses typically lack dedicated staff and resources to handle such complexities, diverting valuable time and capital away from core business activities like product development, marketing, and customer service.
Stifling Innovation and Hampering Competitiveness: The ability to efficiently import components, materials, and finished goods under the de minimis rule is vital for the innovation and product development of many small and mid-sized ecommerce businesses. Eliminating this benefit would increase the cost and time associated with sourcing essential elements, hindering their ability to test new product ideas and respond quickly to market trends. Furthermore, the EIA argues that removing the de minimis exception would create an uneven playing field, disadvantaging smaller businesses that rely on its cost-saving benefits compared to larger retailers with established supply chains.
Significant Price Hikes and Reduced Access for American Consumers: The EIA strongly argues that eliminating the de minimis exemption would lead to higher prices for a wide range of imported goods currently entering the U.S. duty-free, disproportionately harming lower-income consumers. Economic analyses cited by the EIA suggest that eliminating the exemption could result in billions of dollars in added annual costs for consumers. The EIA underscores that lower-income households are more likely to import de minimis shipments, meaning they would bear a disproportionate share of this increased cost burden, making essential goods less accessible.
Disruption of Efficient Cross-Border Trade and Potential for Retaliation: The EIA cautions that removing the de minimis threshold could disrupt the efficiency of direct-to-consumer international trade, leading to delays in delivery times and straining the resources of U.S. Customs and Border Protection. Moreover, the EIA highlights the risk of retaliatory measures from other countries, many of whom also have de minimis thresholds. Eliminating the U.S. exemption could prompt these countries to reduce or eliminate their own thresholds, negatively impacting U.S.-based small and mid-sized ecommerce businesses that export low-value goods.
EIA’s Views Are Broadly Shared By Others Businesses and Trade Associations
The EIA is not alone in recognizing the critical importance of preserving de minimis for the health of the ecommerce sector and the benefit of American consumers. Numerous other key businesses and trade associations have also voiced strong concerns regarding proposals to curtail or eliminate this vital provision, including:
The U.S. Chamber of Commerce has also voiced its appreciation for CBP's recognition of the importance of the release from manifest process, which is central to de minimis, and cautions against eliminating de minimis, emphasizing the potential harm to U.S. businesses and consumers.
eBay expresses concern that the proposed rule, particularly coupled with further restrictions, would impose significant burdens on American consumers and small businesses. They advocate for maintaining a process for importing low-value products without unreasonable data disclosures.
Etsy emphasizes that micro and small businesses and their buyers would benefit from the continuation of de minimis exemptions. They highlight the unique needs of microbusinesses that lack the resources of larger companies and support smart reforms that modernize the customs process without discouraging small businesses from engaging in global trade.
The National Foreign Trade Council (NFTC), representing American global businesses, stresses that de minimis has been an intentional feature of U.S. Customs law for decades and highlights its economic benefits. They argue that collecting duty on high-volume, low-value shipments is inefficient and would generate a net loss for the government and industry.
The Coalition to Protect America’s Small Sellers (PASS Coalition), an organization of ecommerce marketplaces, has advocated for policies that benefit the small businesses and casual sellers using their platforms. They have also proposed tailored exemptions for used and handmade goods and a potential threshold for small sellers.
The chorus of voices from across the ecommerce landscape is clear: the de minimis exemption is a vital tool for economic growth, consumer access, and the success of countless American small businesses.
EIA Proposes Policy To Enhance American Security Without Harming Business and Consumers
EIA has put forth a compelling proposal to leverage the existing framework of U.S. Foreign Trade Zones (FTZs) as a strategic solution to address concerns surrounding the de minimis exception, without jeopardizing its crucial benefits for American small and mid-sized ecommerce businesses. FTZs are a designated, secure area within the U.S. considered outside of U.S. Customs territory, allowing businesses to store, assemble, manufacture, or process foreign goods without paying duties or taxes until they enter the U.S. commerce. There are more than 200 FTZs in the United States and they are located in all 50 states and Puerto Rico, and are often found near major ports of entry.
Recognizing the validity of CBP’s objectives to combat illicit drugs, intellectual property rights violations, and goods made with forced labor, the EIA suggests revisiting and reversing a prior agency legal interpretation that has prevented merchandise admitted into FTZs from qualifying for the de minimis exemption upon withdrawal for individual sales valued at $800 or less. This legal interpretation has created a harmful policy in which goods shipped from around the world often arrive in U.S. ports, are then shipped to and stored in warehouses in Mexico or Canada, before individual purchases are fulfilled by shipping the package back across the border to a consumer’s home or business. EIA’s proposal aims to create a more secure and accountable environment for low-value imports by focusing the de minimis benefit on U.S.-based companies operating within these regulated zones.
By allowing U.S. businesses to utilize the de minimis exception for goods withdrawn from FTZs and destined for American consumers, the EIA believes a strategic advantage can be gained. This framework would incentivize domestic companies to warehouse their goods within the U.S., subject to U.S. laws and customs enforcement, rather than in less regulated facilities in neighboring Mexico or Canada. The EIA argues that this offers a clearer jurisdictional link and enhanced oversight, directly supporting American small and medium-sized enterprises that rely on efficient cross-border sourcing for their direct-to-consumer sales. Furthermore, the EIA proposes that these U.S. businesses utilizing FTZs should either provide the Harmonized Tariff Schedule (HTSUS) code for their goods or obtain a waiver, adding another layer of accountability and helping to mitigate concerns regarding improper use of the de minimis exception.
In essence, the EIA’s FTZ proposal presents a balanced middle ground that preserves the trade facilitation and economic benefits of the de minimis exemption for legitimate American businesses while enhancing security and oversight. By focusing the application of de minimis on U.S. companies operating within the secure and regulated environment of FTZs, the EIA believes CBP can more effectively address its enforcement concerns without imposing broad and disruptive changes that would significantly harm small and mid-sized ecommerce businesses and American consumers. This targeted approach offers a pathway to strengthen the integrity of low-value shipments while ensuring that the engine of ecommerce innovation continues to thrive within the United States.
About the EIA:
The Ecommerce Innovation Alliance is a non-profit trade association dedicated to bringing the ecommerce industry together to advocate for common-sense policies that strengthen the ecommerce ecosystem while protecting consumers. EIA members are generally U.S.-based small and mid-sized ecommerce businesses or vendors that directly support these businesses.
