Estimated Revenue:
$23.5 billion
2024–2034. Using import data from Customs and Border Patrol from 2023, the Congressional Budget Office estimates that enacting the End China’s De Minimis Abuse Act would increase revenues from customs duties by about $24 billion over the ten-year budget window.
Summary
The de minimis rule exempts imported goods from customs duties and taxes if they fall below a certain value. The original purpose was to reduce administrative burdens associated with imports when the amount of revenue to be collected is minimal.
In 1938, Congress set the threshold for the de minimis exemption at a retail value of $1, or about $22 in 2025 dollars. In 2015, Congress increased the threshold to $800, the highest in the world and far higher than thresholds set by key U.S. trading partners. Canada has a de minimis threshold of around $110, Mexico of around $50, and China under $7.
The higher threshold, the proliferation of e-commerce, and tariff evasion strategies developed by countries like China have led to an exponential growth in the number of de minimis shipments entering the United States. In the past decade, de minimis shipments have risen tenfold, from about 139 million a year to over 1.4 billion, with a total retail value worth more than $50 billion.
The Case for Reforming the De Minimis Exception
The deluge of de minimis shipments entering the United States constitutes a de facto trade concession to all our trading partners—a giveaway for which we get nothing in return, and which distorts incentives in our domestic market. The misguided de minimis regime undercuts efforts to prevent the import of illicit drugs like fentanyl and goods produced with forced labor, erodes the effectiveness of trade remedies against China, contributes to the nation’s unsustainable trade deficit, and reduces federal revenue.
Consequently, reforming the de minimis exemption has become the subject of considerable congressional attention. The Biden administration took action to close the trade loophole, and President Trump has instructed agencies to “assess the loss of tariff revenues and the risks from importing counterfeit products and contraband drugs.” Greater scrutiny of de minimis treatment for China was among the key actions taken by the Trump administration in its first month.
Congress should deny de minimis treatment to all goods from nonmarket or hostile nations like China, and to any goods subject to trade and national security remedies, as prescribed in the End China’s De Minimis Abuse Act. Congress should further consider limiting the de minimis exemption for all trading partners to a more reasonable value threshold to ensure the government collects revenue on imports entering the U.S. market.
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