FABRIC URGES CONGRESS TO SUPPORT TARGETED CHANGES 
TO DE MINIMIS EXEMPTION

Dear Chairman Smith, Ranking Member Neal, Chairman Wyden, and Ranking Member Crapo:

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We, the members of the Fostering American Brands for Responsible Imports and Choice (FABRIC) Coalition, a group of American companies dedicated to promoting U.S. job creation, innovation, and economic growth, write to express our views on recent efforts in both Congress and the Biden administration to address the increase in small packages claiming the de minimis exemption. Importantly, our coalition supports targeted changes to the de minimis exemption that will help improve enforcement of trade laws, increase transparency in de minimis shipments, and combat illicit trade coming from China. At the same time, we urge you to maintain eligibility for textile and apparel imports sourced outside of China under the de minimis exemption. Excluding the entire textile and apparel industry from de minimis eligibility would upend supply chains, forcing companies out of business, causing American workers to lose good-paying jobs, and raising prices for consumers at a time when many U.S. families are already struggling to make ends meet.

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As you know, the de minimis exemption is an important legal and longstanding customs provision that allows packages valued less than $800 to enter the U.S. duty-free. This exemption has a long history as a critical tool for small and midsize businesses, helping them survive, scale, grow, and compete with larger players in the market. This is particularly true for the members of our coalition who are exclusively in the textile and apparel industry where smaller and lower dollar transactions are a significant part of our business. It allows us to offer unique products at competitive prices and deliver to our customers quickly, affordably, and safely. Ultimately, those savings enable us to reinvest in our U.S. based workforce, hiring more workers here at home.

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We recognize that shipments claiming the de minimis exemption have significantly increased and that it may be necessary to make certain targeted changes to modernize the program for today’s 21st century global economy. To that end, we agree with the Biden administration’s proposed regulatory changes to the de minimis exemption.¹ Specifically, we are supportive of efforts to make shipments ineligible for de minimis if they contain products that are subject to trade penalties under statutes such as Sections 201 or 301 of the Trade Act of 1974, or Section 232 of the Trade Expansion Act of 1962. Removing goods subject to Section 301 duties from eligibility under de minimis would encompass nearly all textile and apparel imports from China. We also support efforts to improve data collection and transparency for shipments, such as requiring data elements on the person or entity claiming the exemption and the 10-digit Harmonized Tariff Schedule (HTS) code, and to require importers of consumer products to e-file Certificates of Compliance with the Consumer Product Safety Commission and U.S. Customs and Border Protection (CBP) at the time of entry for de minimis shipments. Targeted changes such as these will streamline enforcement of goods subject to U.S. trade laws in the de minimis environment and effectively block all textile and apparel imports from China from claiming de minimis treatment. They will also help CBP improve its targeting capabilities and hold bad actors accountable.

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However, calls to exclude de minimis eligibility for all textile and apparel products sourced outside of China would inadvertently harm trusted American clothing brands and the consumers they serve. One such proposal, which would eliminate benefits for goods designated as “import-sensitive” under the Generalized System of Preferences, effectively removes all textile and apparel imports from de minimis eligibility. Should these proposals, or similar ones, take effect, responsible American businesses like ours would suffer serious economic harms, such as closures, U.S. workers would lose their jobs, and consumers would pay higher prices and have fewer choices. In addition, companies’ opportunities for investment and growth would be severely limited, preventing future job creation.

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Further, the majority of textile and apparel imports from China are subject to Section 301 tariffs, which, under the Biden administration's recent action and bipartisan legislative proposals, would eliminate them from de minimis treatment. We believe this proposed measure will address the chief concerns surrounding illicit textile and apparel imports from China while allowing trustworthy American companies to continue legitimate trade activities that help grow our economy by increasing employment opportunities for U.S. workers, driving investments in our communities, and boosting consumer choice, allowing for more affordable options for U.S. families. We urge Congress to quickly codify the Biden administration’s action to send a strong enforcement signal to illicit traders in China and provide much-needed certainty for responsible U.S. businesses and their workers. 

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We appreciate congressional engagement in promoting a healthy, safe, and competitive trading environment for U.S. businesses and consumers, and we look forward to working with policymakers to achieve a balanced outcome.

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