U.S. Customs and Border Protection has announced the following information with respect to the collection of import duties on products of China (including Hong Kong) once the de minimis exemption for such goods ends on May 2.
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Background. Section 321 of the Tariff Act of 1930 allows for the informal entry of articles that have a retail value of $800 or less and are imported by one person in one day. These de minimis shipments are generally free of duty and taxes and subject to expedited clearance processing.
However, an April 2 executive order from President Trump provides that as of May 2 this exemption will no longer be available for Chinese-origin goods valued at or under $800 that would otherwise qualify for the exemption. CBP has now clarified that these changes will take effect with respect to subject goods entered or withdrawn from warehouse for consumption on or after 12:01 a.m. EDT on May 2 (or June 1, as applicable; see below).
Shipments via postal network. As of that time such shipments sent through the international postal network and transported by carriers will be subject to one of the following two duty rates, as elected by the carrier: (1) 120 percent of the value of the postal item containing goods, or (2) $100 per postal item containing goods ($200 for goods entered for consumption on or after 12:01 a.m. EDT on June 1). CBP states that these duties will be in lieu of any other duties to which such shipments would otherwise be subject, including the 20 percent tariffs imposed in response to concerns about fentanyl and illegal immigration, most-favored nation duties established in the HTSUS, and Section 301 tariffs. They will also apply to subject shipments even if they are shipped from China or Hong Kong to another country and then transported to the U.S.
Carriers must collect these duties, remit them to CBP either once a month “or on such other periodic time frame as CBP determines is appropriate,” and maintain an international carrier bond to ensure the duties are remitted. Carriers must also (1) report the total number of postal items containing goods and (2) if electing the 120 percent duty rate, the value of each postal item containing goods, transported per conveyance, in a specific time frame and manner. Detailed guidance for carriers for filing data and remitting duties is available here.
Other shipments. Subject shipments sent through means other than the international postal network will be subject to all applicable duties (e.g., Section 301 tariffs, reciprocal tariffs, etc.), taxes, and fees and must be entered under an appropriate entry type (e.g., 01 or 11) in the Automated Commercial Environment by a party qualified to make entry.
(CBP notes that shipments valued at or under $800 that would otherwise be ineligible for the de minimis exemption, such as shipments of goods subject to antidumping or countervailing duties or quotas, must continue to be entered under an appropriate entry type in ACE.)
Regulations suspended. CBP states that it is suspending certain regulatory provisions that would otherwise impede its ability to implement these changes. This includes a parenthetical clause in 19 CFR 143.21(a) that typically requires formal entry for goods classified in HTSUS Chapter 99, Subchapters III and IV, that are valued in excess of $250. According to CBP, this suspension applies to all modes of entry and all countries of origin. CBP plans to update its systems to reflect this change on April 30, which will allow the filing of a Type 11 informal entry for articles valued at up to $2,500.
CBP is also suspending 19 CFR 145.12(b) pertaining to its preparation of informal mail entry. CBP states that this change applies to all informal mail entries from China or Hong Kong, regardless of value. Consequently, during the temporary suspension, formal entry will be required for mail shipments from China or Hong Kong valued at over $800.
The suspension of these and similar regulations is intended to be temporary, but CBP has not indicated when it might be terminated.
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