On Friday, August 9, five heavyweight US senators jointly launched a bipartisan legislation to block Chinese parcels from flooding in through an $800 loophole.
Members of the Senate Committee on Finance stated that the legislation named the “Fighting Illegal Goods, Supporting Trustworthy Importers, and Growing Net Duty Revenues Act” (FIGHTING) could help Customs and Border Protection (CBP) tighten the requirement for “minimum duty-free parcels” to prevent illegal goods (including fentanyl, counterfeit products, and products made with forced labor) from entering the United States.
In recent years, the quantity of direct shipments to US consumers from large Chinese e-commerce platforms such as Shein and Temu has quadrupled.
These foreign companies are accused of abusing the “minimum value threshold principle” in US customs procedures, which allows parcels valued under $800 to enter duty-free and through a simplified process.
The FIGHTING Act will tighten the rules for minimum value threshold imports to ensure that these corporate giants cannot exploit the minimum value threshold procedure to avoid paying duties on textiles, shoes, clothing, or evade trade penalties imposed for Chinese trade fraud.
The legislation will require improvements in the supervision of the minimum value threshold import process, including requiring CBP to collect more information about commercial parcels, facilitating the identification and seizure of illegal goods, and increasing penalties for wrongdoers.
With a surge in parcel quantities, US Customs and Border Protection has been struggling to target problematic foreign goods, preventing parcels containing illegal drugs, counterfeit products, goods made through forced labor, and other products violating US law from entering.
Democratic Senator Ron Wyden from Oregon said, “Foreign corporate giants are flooding our borders with millions of low-value parcels, making it difficult for customs officers to prevent dangerous products like fentanyl from ending up in the hands of Americans.”
“Our legislation will hold foreign companies accountable for abusing the law and ensure they follow the rules,” added Wyden.
Republican Senator Cynthia Lummis from Wyoming mentioned that Beijing is utilizing any means available to smuggle illegal drugs across US borders, including through the southwest border and mailing parcels.
“Now is the time for CBP to crack down on Chinese goods to ensure that drugs and products manufactured using forced labor are discovered before entering our communities,” stated Lummis.
Democratic Senator Sherrod Brown from Ohio stated that by tackling this loophole and providing more resources to law enforcement agencies, this bipartisan legislation will create a fair competitive environment for workers, manufacturers, and retailers while helping to prevent deadly fentanyl from entering communities.
“Countries like China are exploiting the minimum value threshold loophole to deceive US trade regulations and shipping parcels containing fentanyl and other illegal substances in large quantities to the US,” said Brown.
Republican Senator Susan Collins from Maine stated, “Chinese companies continue to abuse loopholes in US trade laws. It is necessary to strengthen customs supervision of low-value imported products entering the US to combat these abuses of duty-free entry procedures.”
She added, “This bipartisan legislation will enhance CBP enforcement, improve data collection, streamline import approval processes to address illegal import issues, protect domestic industries, and ensure fair trade practices.”
Democratic Senator Bob Casey from Pennsylvania expressed concern that too many families have lost loved ones due to the fentanyl crisis.
“We need to fight back against those who exploit loopholes in US trade laws that allow dangerous goods (including fentanyl and products made using forced labor) to go undetected, enter the US duty-free, and inspection-free by foreign companies and traffickers,” Casey said. “This legislation is a crucial step in combating cross-border fentanyl smuggling, and I will continue to work hard to combat the fentanyl crisis.”
Graham Trainor, the Chairman of the AFL-CIO in Oregon, expressed support for the bill, stating that it is a positive step towards pursuing trade policies that protect American workers and consumers.
Another AFL-CIO chairman, Kim Glas, noted that the loophole in the minimum value threshold provision has had a “devastating impact on American manufacturers.”