Policy Brief: De Minimis Threshold

1What Is a De Minimis Threshold?

In an international trade context, a "de minimis" refers to shipments of imports falling below a minimum value that are eligible for duty-free entry, subject to certain conditions. Per Section 321, 19 USC 1321, the de minimis threshold for imports into the United States is $800 per person per day. The United States currently has the highest de minimis threshold among its primary trading partners and one of the highest thresholds in the world.

Figure 1: U.S. De Minimis Threshold Compared to Top 5 Trade Partners. Source: Global Express Organization; U.S. Census Bureau.

Figure 2: Top 5 De Minimis Shipment Origins (2021). Source: U.S. Customs and Border Protection.

2Impact on Consumers & Small Businesses

In 2015, the Trade Facilitation and Trade Enforcement Act increased the de minimis threshold from $200 to $800. According to George Mason University's Mercatus Center, the higher threshold has lowered costs for consumers and small businesses, as more and higher-value shipments are now exempt not only from duties and taxes but also from Customs brokerage fees, handling charges, and time delays typically incurred during Customs processing.^[1]

Since the de minimis threshold was increased, the annual volume of e-commerce shipments valued at $800 or less tripled — from roughly $250 million in FY 2016 to over $750 million in FY 2021.^[2]

3Why Is the Threshold Under Scrutiny?

The primary criticisms of a higher de minimis threshold are twofold: (1) it creates a tax advantage for some entities, and (2) it potentially creates a vulnerability that bad actors can exploit to smuggle illicit goods into the United States.

4Congressional Response

As of September 2023, two bills in Congress seek to change de minimis rules.

• The De Minimis Reciprocity Act of 2023 (S.1969), sponsored by Sen. Cassidy [R-LA] and cosponsored by Sen. Baldwin [D-WI] and Sen. Vance [R-OH], would: forbid all Chinese imports from entering the U.S. via de minimis procedures; lower the threshold to match each trading partner's own de minimis level for shipments originating from the U.S.; and require CBP to collect more information on de minimis packages.
• The Import Security and Fairness Act (S.2004 / H.R.4148), sponsored by Sen. Brown [D-OH] with bipartisan support in both chambers, would: prohibit imports via de minimis procedures from countries that are both non-market economies and on USTR's Priority Watch List; and require CBP to collect more information on de minimis packages.

5Impact on Washington State Businesses

If passed, these bills could significantly impact Washington state businesses and the broader U.S. trade economy in three key areas:

• Greater stress on limited CBP resources: An additional 22,000 Customs officers would be needed to subject de minimis packages to standard screening procedures.^[5]
• Higher costs for consumers: The absence of de minimis trade could result in significant cost increases. For example, with no de minimis threshold, a $50 package could nearly double in cost due to the brokerage and merchandise processing fees required by typical Customs procedures.^[6]
• Less opportunity for small businesses: Participating in the e-commerce economy via de minimis is an essential growth channel for many small businesses. Lowering de minimis would disproportionately impact small businesses, which import in smaller batches and have less administrative capacity than large businesses.^[7]