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Committee spotlights de minimis loophole and transshipment as major enforcement gaps
Summary
Members and witnesses told the Trade Subcommittee that the de minimis exception for low‑value shipments and transshipment through third countries have become major paths for tariff evasion, fentanyl shipments and circumvention of antidumping and countervailing duty orders.
Members of the House Ways and Means Trade Subcommittee used Thursday's hearing to focus attention on the de minimis exemption and transshipment as key enforcement vulnerabilities that undermine U.S. trade remedies and border controls.
Ranking Member Rep. Linda Sanchez and several Republican members described a dramatic rise in low‑value package imports that avoid duties and inspections under the de minimis rule. "This de minimis loophole has gutted U.S. manufacturing and retail and facilitated the entry of... fentanyl," Rep. Sanchez said. Former deputy USTR Jeffrey Gerrish and other witnesses agreed that reforming de minimis eligibility for imports subject to trade enforcement actions is a high priority.
The scope: Witnesses cited record numbers of de minimis shipments in recent years (figures discussed during the hearing included totals of hundreds of millions to over a billion packages in cited timeframes). Members said the surge has limited customs's ability to enforce antidumping/countervailing duties and increased risks of illegal goods entering the U.S.
Transshipment and mislabeling were repeatedly described as related problems. Former USTR officials and trade lawyers said Chinese producers and intermediaries shift production or paperwork through third countries to avoid duties, artificially change country of origin, or misclassify product types. These practices can neutralize remedies that take years and hundreds of thousands of dollars to obtain.
Legislative and enforcement responses discussed: witnesses and members called for several remedies already under consideration in Congress, including: - Eliminating de minimis eligibility for imports subject to Section 301, Section 232 and trade-remedy actions; - Strengthening the Enforce and Protect Act and using certification and anti‑evasion tools to require proof of non‑subject status for imported goods; - Expanding customs cooperation with partner countries and giving U.S. Customs authority to self‑initiate evasion investigations.
Representative Dusty Johnson and Rep. David Cicilline were not present in the transcript but members across parties pressed for prompt action. The session did not include a vote; members asked witnesses for written followups and legislative text recommendations.
The hearing also connected de minimis and transshipment to public safety and law enforcement: several members argued that extremely low‑inspection parcel flows have been used to move illicit substances while evading duties and oversight.
Ending: Lawmakers signaled bipartisan interest in bills to close the de minimis loophole and to bolster customs authority; specific statutory text and timing were left to future hearings and markups.
