US de minimis - big changes possible?

[cottagewoman]

https://www.whitehouse.gov/briefing-room/statements-releases/2024/09/13/fact-sheet-biden-harris-admi...

The White House is taking executive action on 800$ or less shipments that fuel my business and I imagine many other sellers on eBay in Canada, driven primarily by the surge in these shipments from China. They intend to remove large swaths of types of goods from using the de minimis exemption. What is not clear is if this will affect shipments from other countries or from China only. If anybody from eBay has more clarity it would be extremely helpful, or if others have any insight into this matter. The exclusion list hits about 75% of my inventory - just look up 'section 301 tariff goods list' and you'll see what I mean. Having to send items to the US via formal customs entry is not really an option - it costs crazy amounts of money in broker fees, etc. Praying some sense will be coming in this matter!

[marnotom!]

Are you selling items made in China?

[cottagewoman]

Sometimes, yes. I'm an everything seller, mostly 2nd hand goods. Thing is, the way the acts are written, it looks that it's possible that all goods that are in the 201, 232 and 301 tariff lists will be excluded. There was no mention if they needed to be be Chinese made.


But in the next quoted section, it does mention that goods shipper from China to the USA would be targeted:

'Some e-commerce platforms and other foreign sellers circumvent these tariffs by shipping items from China to the United States claiming the de minimis exemption. If finalized, these goods would no longer be eligible for the de minimis exemption.'

[recped]

There really isn't any "clarity" available. Kind of hate to say it but this is really at the "concept of a plan" stage and I'm not sure how well thought out the whole idea is. Add to that, unless the Dems end up controlling the House and pick up more Senate seats it's likely to never happen.

In any event, the concept sounds ok but the implementation would face a lot of difficulties and anyone who thinks this will diminish imports from Asia they are mistaken. It could allow bulk importers to raise prices so I'd bet Dollar General, Walmart etc would be happy if it came into effect. Consumers on the other hand are not going to like the inflationary effects.

[cottagewoman]

I get your point ls, all very well made. However given the protectionist tilt in the Republican party as well it could pass. Let's hope it gets focused on Chinese shipments - I can't imagine other countries are willing to cheer on these actions as an entire business channel (direct business to consumer) gets wiped out.

[recped]

It was Republicans who pushed for and passed the increase of the de minimis maximum from $200 to $800. Although Obama signed the 2015 Bill it was the Republican majority in Congress at that time which introduced and passed it.

[mrdutch1001]

Thankfully, I shall have no worries about this... I am not  one of those sellers who is reliant on any goods/items from other countries and that my inventory is my own and I do not "source products/items" from outside Canada.

[cottagewoman]

I source all my items here in Canada as well - but they are second hand goods, and some are made in China, actually quite a few.

My concern is that the way the fact sheet from the White House is worded, it could mean that de minimis shipments in general (not just from China) will exclude literally thousands of items. It doesn't expressedly state that only shipments from China directly are excluded. Which would mean any de minimis shipments entering the US from any country would have to follow the new rules.

We've enjoyed an open US market as Canadian sellers for over 90 years, as even with a 200$ limit no large swath of specific goods have been excluded. I'm hoping this isn't the case and only products shipping directly from China will be excluded.

Formal customs entries are expensive, require brokers, and are time consuming. We don't all want to have to be facing that situation.

[mrdutch1001]

Anything I list that is USED goods is NOT made in China as I choose not to list any Made in China goods; but that's a choice I made years ago...

[cottagewoman]

I understand your position which you are able to support in your business model. What I am concerned about is that any goods on the lists mentioned, regardless if they are made in China or not, will be excluded. In other words any goods on the list no matter where they are made will be blocked from de minimis shipments.

[mrdutch1001]

IMHO, this may be a good thing...as I am 100% in favor of limiting the amount of made in China junk that is imported into North America. Let's Bring back the "Made in Canada" goods!....and make Canada great again!!

well, one can dream......

[byto253]

A lot of used items do not say where they are manufactured.  It is not straight forward.

[lotzofuniquegoodies]

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@byto253 wrote:

A lot of used items do not say where they are manufactured.  It is not straight forward.

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@byto253 

@cottagewoman 

Can you imagine the backlog for customs processing this would/could cause? Almost every package would need to be opened and then the tax collection from buyers.? If they don't have enough staff to process people how would they process/inspect all the parcels? Probably why when you go to fill in customs for country of origin the default order is USA...China....Canada....Everyone else.

[cottagewoman]

I think this is the whole idea - there is strong bipartisan support in the government to severely limit and even eliminate the de minimis on ecommerce from outside the US. Big companies like Temu and Shein - they can work around all of this with their vast resources. They can setup warehouses in the US, import product at wholesale value and pay the tariffs at pennies on the dollar and keep doing what they do. Small businesses outside the US that rely on de minimis to avoid all kinds of complexity and costs are going to be the most affected.

[reallynicestamps]

@lotzofuniquegoodies This is why so many eBay buyers were upset by purchases shipped through couriers or GSP.

The Canadian duty free allowance was so low, that CBSA officials just ignored low value imports in the mail stream because it cost too much to process them.

Leaving buyers/importers under the impression that we could import anything duty free "under NAFTA".

But the commercial entities had to follow the law, and charged for their time.

So a $30 import could have a $25 "customs brokerage fee", which neither buyer nor seller realized.

[cottagewoman]

So basically the US is going to take a hammer to the whole process of streamlining customs entry and just exclude a ridiculous amount of goods to be imported via de minimis - hopefully only from China. 

As per the original link I posted, about 40% of the items imported into the US are on the Chinese 301 tariff list.  I've looked through it- about 80% of what I sell is on that list.

Let's just put it this way - things are a changin'.  What shape it'll take - who knows.  Hopefully some sense will play into the process- but this is all very political and as we all know, right now any hot topic that reads well for the sake of the American voter is going to be pushed hard.

[lotzofuniquegoodies]

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@reallynicestamps wrote:

@lotzofuniquegoodies This is why so many eBay buyers were upset by purchases shipped through couriers or GSP.

The Canadian duty free allowance was so low, that CBSA officials just ignored low value imports in the mail stream because it cost too much to process them.

Leaving buyers/importers under the impression that we could import anything duty free "under NAFTA".

But the commercial entities had to follow the law, and charged for their time.

So a $30 import could have a $25 "customs brokerage fee", which neither buyer nor seller realized.

---

@reallynicestamps 

@cottagewoman 

@byto253 

Total agreement.  Why I suggested in the past if something was going to be shipped using GSP in the past and eIS going forward should clearly show HOW anything be shipped. Not at their discretion. So from buyers perspective there isn't customs processing shock. 

Stuff to ponder if this were to kick in:

Can you imagine if eBay got "involved" as a go between collecting tax owing? What it would do Canadian seller fees and or delivery time?🤑😨😱

Anyone aware of what US buyers currently pay for customs clearance by mail when tax is applicable? (Formal entry). Not like as a shipper with eBay Labels you can actually mark it as DDU. Delivery Duties Unpaid or any other variation there of like you can(MUST) with a courier shipment. With Shippo and the bonus expanded customs form this was NOT an issue. (Other PITA would be accessing  Tax ID numbers from buyers. Most do not give that information  without a fight. Similar to Canadians and SIN.)

Re: Incoterms

https://www.easyship.com/blog/duties-and-taxes-glossary#what-is-incoterms

As per Fedex but applicable across the board.

U.S. Customs and Border Protection (CBP) require the Ultimate Consignee ID number for all formal entries at the time of entry or release. The Ultimate Consignee ID number is the Internal Revenue Service Employer Identification Number (EIN) issued to most business entities, or the Social Security Number (SSN) issued to individuals. We recommend that the shipper includes the Ultimate Consignee ID number on the customs invoice that accompanies each shipment – missing numbers may result in shipment delays and possible return to Canada.

When is a Tax ID required?

A tax id is required when importing goods into the United States (US) that require a formal entry.

[cottagewoman]

I've pondered much of this myself, regarding how things would be handled moving forward if de minimis was basically removed.  I imagine eBay would have to step in in some kind of role - woosh.  Or they may just bail on all the secondary markets they support - like Canada - since I can't imagine it would be a minor undertaking.  We're small fry compared to the USA, China, India, EU, etc.

Anyways I hope there is some advocacy for the international small business community when this all starts being reviewed, etc - but I seriously doubt it.  I don't think the US is going to care too much, they want to protect their own trade, etc.  Not like it's going to seriously stop the inflow of cheap Chinese goods into the US, as I said earlier there are many strategies big international ecommerce companies can use, de minimis isn't a cornerstone of their business.  For small international businesses, especially us here in Canada, it is a cornerstone.

[byto253]

This would hammer the US consumer as well and drive up costs.

[reallynicestamps]

US buyers are paying sales taxes now on imports, before shipping.

Adding duty would be like adding GST , a federal tax, to our imports to Canada.

Simpler actually than state taxes, since the federal tax would be the same for every US resident, when applicable.

When applicable being the problem.

EBay should be more aggressive in having sellers add those HS codes to packages. The duty would be based on that international system.

I agree that lowering the de minimus would raise the cost of imports to the buyer, just as Trump's beloved tariffs are a tax on US consumers.