A company has filed suit in the Court of International Trade to challenge the Trump administration’s elimination of de minimis eligibility for imports from China.
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, as of May 2 this exemption is no longer available for Chinese-origin goods that would otherwise qualify. As a result, such shipments sent through the international postal network and transported by carriers are subject to one of the following two duty rates, as elected by the carrier: (1) 54 percent of the value of the postal item containing goods, or (2) $100 per postal item containing goods. Low-value shipments from China sent through other means are subject to all applicable duties (e.g., reciprocal tariffs, Section 301 tariffs, etc.), taxes, and fees.
In a case filed May 16, an auto parts retailer and distributor is asking the CIT to hold this change to be unlawful and halt its enforcement, asserting that failure to do so could force the company to largely cease its operations by the end of June. The petition claims that the elimination of the exemption is unlawful because it (1) the de minimis statute does not authorize the president or any other executive branch official to suspend or eliminate the exemption by administrative fiat and (2) is arbitrary and capricious in violation of the Administrative Procedures Act because it ignored the impact on those that rely on the exemption, failed to consider related economic costs and benefits, did not take reasonable alternatives into consideration, and “has no articulated or apparent link to the problem the government cited as justification.”
The company points out that with the elimination of the de minimis exemption its auto parts imports from China are now subject to a number of tariffs: a 25 percent Section 232 tariff on auto parts, a 20 percent tariff imposed under the International Emergency Economic Powers Act due to concerns about shipments of fentanyl, a 25 percent Section 301 tariff on China-origin goods, and a 2.5 percent most-favored-nation tariff on auto parts.
However, the company argues that the IEEPA tariffs are unlawful because that statute only authorizes the president to regulate imports, which does not include the power to levy tariffs. Even if IEEPA did grant such authority, the company states, doing so would be an unconstitutional delegation of congressional power and would be overridden by “Congress’ clear instructions” in the de minimis law, which “creates a specific and comprehensive scheme governing the de minimis exemption.” (Click here for more information on other court cases challenging IEEPA tariffs.)
Copyright © 2025 Sandler, Travis & Rosenberg, P.A.; WorldTrade Interactive, Inc. All rights reserved.