End China’s De Minimis Abuse Act

Bill Number

H.R. 805

Origin Chamber

House

Congress

119th Congress, Session 1

Policy Area

Foreign Trade and International Finance

Status

Introduced

Latest Action

2025-01-28: Referred to the House Committee on Ways and Means.

Last Updated

2025-07-15T18:39:32Z

AI-Generated Summary

Purpose

The "End China's De Minimis Abuse Act" (H.R. 805) aims to prevent the abuse of a trade exemption known as the de minimis rule, which allows low-value shipments (up to $800) to enter the U.S. without paying duties or taxes. It specifically targets loopholes that enable imports from countries like China—subject to U.S. trade restrictions—to bypass tariffs, ensuring fairer enforcement of existing trade laws.

Key Provisions

• Restriction on Splitting Shipments: The exemption cannot be used if merchandise from a single order or contract is divided into smaller lots to qualify under the $800 threshold.
• Denial of Exemption for Restricted Goods: The $800 duty-free privilege does not apply to articles subject to specific U.S. import duties or restrictions, including:
• Antidumping and countervailing duties (which protect U.S. industries from unfairly priced foreign goods).
• Safeguard measures under Section 201 of the Trade Act of 1974 (temporary protections against import surges).
• Unfair trade practices under Section 301 of the Trade Act of 1974 (e.g., tariffs on Chinese goods for intellectual property issues).
• National security tariffs under Section 232 of the Trade Expansion Act of 1962 (e.g., on steel and aluminum).
• Additional Requirements for Covered Articles: Imports from countries facing Section 301 restrictions (such as China) must include a detailed 10-digit classification code from the Harmonized Tariff Schedule (HTS—a standardized system for identifying goods) when filed electronically with U.S. Customs and Border Protection (CBP). This applies only to "covered articles" originating from those countries.
• Penalties for Violations: Individuals or entities that violate these rules face civil penalties of $5,000 for the first offense and $10,000 for each subsequent one, in addition to any other legal penalties.
• Effective Date: Changes apply to goods entered or withdrawn from warehouses starting 30 days after the bill's enactment.

Significant Changes to Existing Law

• Amends Section 321 of the Tariff Act of 1930, which previously allowed broad de minimis exemptions without these restrictions.
• Introduces new limits on the exemption for goods under trade remedy laws (e.g., Sections 201, 301, and 232), closing a gap that allowed low-value shipments to evade tariffs.
• Adds mandatory electronic reporting of HTS codes for certain imports, enhancing transparency and CBP oversight, which was not previously required for de minimis entries.
• Imposes specific penalties tailored to these violations, building on but not replacing existing customs penalties.

Potential Impacts

• On Government Agencies: CBP will need to increase scrutiny and processing of low-value imports, potentially requiring more resources for electronic filings and enforcement, which could improve compliance but strain operations initially.
• On Citizens and Businesses: U.S. consumers may face higher prices for inexpensive imported goods (e.g., from e-commerce platforms), as more shipments will incur duties. Domestic manufacturers could benefit from reduced competition from tariff-evading imports.
• On International Relations: Strengthens U.S. trade enforcement against countries like China, potentially escalating trade tensions but supporting broader efforts to address unfair practices. It may encourage other nations to align with U.S. trade policies.

Main Stakeholders Affected

• Importers and E-Commerce Companies: Entities shipping low-value goods from restricted countries (e.g., Chinese sellers on platforms like Temu or Shein) will face new compliance costs and potential duties, disrupting business models reliant on de minimis loopholes.
• U.S. Customs and Border Protection (CBP): Gains tools for better enforcement but may see increased workload in verifying HTS codes and investigating split shipments.
• U.S. Manufacturers and Workers: Protected from subsidized or unfairly traded imports, potentially boosting domestic industries affected by Chinese competition.
• Consumers: Primarily impacted through higher costs for affordable imported products, though it may promote fairer trade overall.
• Foreign Exporters (e.g., from China): Face barriers to the U.S. market, possibly shifting supply chains or prompting negotiations on trade restrictions.

Notable Legal, Constitutional, or Political Implications

• Legal: Reinforces the enforceability of existing trade remedy statutes (e.g., Section 301) by closing evasion routes, without altering the underlying tariffs. The added penalties provide a civil enforcement mechanism, complementing criminal customs laws, and ensure compliance with electronic filing requirements under the Tariff Act.
• Constitutional: Aligns with Congress's enumerated power to regulate commerce and impose tariffs (Article I, Section 8), upholding presidential trade authority delegated through acts like the Trade Act of 1974.
• Political: Signals a bipartisan push to counter perceived trade abuses by China, fitting into ongoing U.S. efforts to protect intellectual property and national security in global trade. It could influence future trade negotiations but risks retaliatory measures from affected countries.

This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.

Sponsor

Rep. Murphy, Gregory F. [R-NC-3]

Cosponsors (1)

Rep. Thompson, Glenn [R-PA-15]

Recent Actions

• 2025-01-28: Referred to the House Committee on Ways and Means.
• 2025-01-28: Introduced in House
• 2025-01-28: Introduced in House

Bill Versions

• End China’s De Minimis Abuse Act — issued 2025-01-28 — PDF (4 pages)