Federal lawmakers are considering legislation that would alter or effectively eliminate the use of de minimis, a U.S. trade rule that allows imports valued below $800 to enter the United States free from tariffs and added fees. In new research, Data Analyst Jacob Jensen calculates the costs and broader economic impacts of eliminating de minimis.

Key points:

• The primary argument for restricting what critics call the “de minimis loophole” is that it disfavors U.S. trade interests and allows a path for illicit drugs and counterfeits to enter the country.
• These arguments ignore the extent to which data collection already takes place and fail to weigh the economic harms that would result from eliminating this rule.
• The full elimination of de minimis would impact more than 1 billion shipments – in total, valued at $54 billion – and would result in $8 billion to $30 billion in additional annual costs that would eventually be passed on to consumers; eliminating de minimis would also harm small businesses, which would be forced to absorb these costs or else lose customers, as well as damage trade relations by encouraging retaliation.

Read the analysis