Zach Mottl, chief alignment officer of Atlas Tool Works and a past chairman of the Technology and Manufacturing Association of Illinois, is a very unhappy American.
Four of his state’s members of the House of Representatives are trying to block the White House effort to lower the “express shipment” measure included in the de minimis rule. This regulation currently allows China to send us goods without any tariffs or customs duties, as long as the value is less than $800.
These anti-American politicians – tools of global businesses – oppose lowering this limit to $200: Cheri Bustos (D), Bradley Schneider (D), Danny Davis (D), Mike Quigley (D) and Never-Trumper Darin LaHood (R).
Mottl said the current deal with China is blatantly unfair:
China’s de minimis level is a mere $8. That means any American company shipping a product to China – valued at more than $8 – must pay a duty. But there’s no reciprocity; a Chinese good priced as high as $799 can enter the U.S. duty-free.
In 2016, Congress increased the de minimis limit from $200 to $800.
That opened the floodgates, allowing companies like Amazon to further incentivize imports, Mottl explained.
My manufacturing company, Atlas Tool Works, has been in operation in Illinois since 1918. We are a textbook example of the kind of domestic American company that has been surviving for years in the face of heavily subsidized imports. And our nearly 80 employees depend on Atlas for their jobs and livelihoods.
Mottl said the current system is being exploited and the $800 limit is being abused to allow a flood of goods entering the United States, often with much higher ticket prices than listed on import documents:
For example, 60 counterfeit Chicago Cubs jerseys were recently seized at O’Hare Airport. The jerseys were listed at a value of only $177. But a Customs official estimated the merchandise would have actually sold for $7,200.
Duties are only charged based on the value of the import. Popular items, such as designer sunglasses may sell here for $500 or more, but their actual price to import from China usually ranges between $7 and $15. That means 100 sunglasses would avoid any import duties ($700 declared), but would retail here for $500 X 100, or $50,000 total.
Also, Congress could better serve America’s manufacturers by passing the U.S.-Mexico-Canada Agreement (USMCA), Mottl said.
The pending deal contains helpful enforcement mechanisms and also directs Canada and Mexico to raise their current de minimis levels.
Matching America’s de minimis levels to those of our trading partners could help to ensure a more level playing field.
Meanwhile, Bustos, LaHood, Schneider, Davis, and Quigley have written to U.S. Trade Representative Robert Lighthizer, explaining that they “strongly oppose any effort … to lower the $800 de minimis threshold” in the U.S.
Their stance is purely pro-business, benefiting huge corporations like Amazon and Walmart, who can use multiple small purchases to avoid the duties our goods face in China. This is not the historic stance of the Democrat Party, which has long supported workers and consumers over retailers and wholesalers.
As Mottl explained:
These representatives are essentially arguing for a lopsided policy that enables Amazon — one of the world’s most profitable companies — to keep importing subsidized, low-cost goods from China at absolutely no cost.
This is doubly egregious considering that Amazon paid zero federal and state taxes in 2018 on more than $11 billion in profits.