Confusing rules
06/03/25 02:15
My sister is visiting us for a few days during her vacation from work. On Tuesday, we went to a local restaurant for a seafood lunch and a walk along the shore. The restaurant we chose is just across the border in Canada. One of the things about living on the border is that we get used to passing through the entry checkpoints and answering a few questions from the agents as we do so. Passports or passport cards are required to go into or out of Canada. Besides remembering to take our passports, we don’t think much of a border crossing. There are school children in Point Roberts who cross the border twice, getting to school on their bus and then twice again on their return trip.
On Tuesday, the crossing times were very short. We didn’t have to wait to enter Canada and were in the third or fourth car in line returning to the US. Upon our reentry, we were asked what we had purchased in Canada. Our only purchase had been lunch, which we had eaten before we returned, so we had no import goods to report.
Over the years, we have learned that the agents are not concerned with souvenirs or other small purchases. There are specific rules about importing raw food such as meat, eggs, dairy, etc. In general, cooked foods are exempt from animal and health inspections. Other items such as alcohol and firearms or weapons also have specific rules that apply when taking them across the border. Since we don’t carry weapons and aren’t big consumers of alcohol, we’ve never had a problem. Once, when crossing the border with our camper, we forgot about the eggs in our refrigerator and were given the choice of cooking them on the spot or surrendering them.
After we got home from our lunch on Tuesday, I realized that part of what was going on at the border was that new rules were going into effect. I expect that the new tariffs imposed by the US and retaliatory tariffs imposed by Canada won’t be an issue for us because both countries have de minimus rules. There is a specific value of goods that an individual can import without incurring import duties.
De minimus is a legal term by which a law enforcement system or court does not consider trifling matters. The term comes from a Latin expression that means “pertaining to minimal things.”
The original Smoot-Hawley Tariffs, passed in 1930, had no de minimus exception. In 1938, as part of the recovery legislation of the Roosevelt administration, Congress amended the act to make a formal de minimus exception of $1. In 1978, that amount was raised to $5. It has been going up ever since. The most significant change occurred in 2016 when the amount was raised from $200 to $800 under a law whose primary sponsor was US Senator John Thune of South Dakota. The rule change was made to encourage the direct importation of items from countries of origin. The result of the rule change was dramatic in its impact. Companies regularly importing goods into the United States could now ship an item valued at less than $800 directly to a consumer without incurring import fees. Large companies in other countries, such as China, began shifting from importing goods in large shipping containers with high values to shipping individual packages directly to consumers.
Having vast amounts of inexpensive consumer goods, clothing, and other items directly shipped to consumers has put an enormous strain on the U.S. Postal Service. Instead of goods entering the US at shipping terminals, being processed with fees paid, and then shipped in bulk to stores, many goods are shipped directly to consumers in small packages. Chinese e-commerce giants SHEIN and Temu relied on this exception to ship inexpensive goods directly to US consumers. This is not a tiny part of the economy. Those two companies ship hundreds of millions of packages.
De minimus rules have been one of the most significant factors in the devastating decline of the domestic textile industry. They have also allowed hundreds of millions of packages to enter the country without inspection, facilitating the illegal drug trade.
This week, imposing new tariffs has caused much confusion about de minimus rules. The President issued an executive order suspending de minimus amounts for Canada, Mexico, and China, another allowing for de minimus exemptions, and more confusing orders.
The customs and border patrol agents we see when we cross into and out of Canada are a small part of what is required to enforce import and export rules. A complete suspension of de minimus for a single country, China, for example, would require a massive increase in the number of the agents needed to inspect packages and likely would result in long delays in delivering goods. US Customs and Border Protection is unprepared for the deluge of packages, and US ports of entry are overwhelmed with a backlog of packages. Bonded warehouses are filled with goods that can be stored pending inspection.
The rules are even more complex. Goods can be imported by three customs processes: formal entry, informal entry, and de minimus. The complex rules create significant confusion at US ports of entry, especially those where goods are transferred. We can see the difference by comparing the two border crossings in our town. The freeway, where private cars come and go, has very short lines with wait times under five minutes. At the same time, at the other entry, where the semi-trucks hauling goods enter, the lines are backed up enough to block intersections in town with wait times as high as 45 minutes.
This is only the first week, and one supposes that some of the confusion will settle with experience, but Congress is considering several potential changes to the rules.
We live in a world economy. Attempts at protectionism can have unintended consequences. Eliminating the de minimus exemption will affect consumers at the lowest economic levels. The result is expected to increase the gap between the rich and the poor in our country and the number of people who cannot afford essential goods and services.
If this essay sounds confused, it is because I am confused. And I’m not the only one. Meanwhile, I try to listen carefully and answer truthfully when we cross the border, and I have no plans to make a shopping trip to bring items home from Canada anytime in the near future.
On Tuesday, the crossing times were very short. We didn’t have to wait to enter Canada and were in the third or fourth car in line returning to the US. Upon our reentry, we were asked what we had purchased in Canada. Our only purchase had been lunch, which we had eaten before we returned, so we had no import goods to report.
Over the years, we have learned that the agents are not concerned with souvenirs or other small purchases. There are specific rules about importing raw food such as meat, eggs, dairy, etc. In general, cooked foods are exempt from animal and health inspections. Other items such as alcohol and firearms or weapons also have specific rules that apply when taking them across the border. Since we don’t carry weapons and aren’t big consumers of alcohol, we’ve never had a problem. Once, when crossing the border with our camper, we forgot about the eggs in our refrigerator and were given the choice of cooking them on the spot or surrendering them.
After we got home from our lunch on Tuesday, I realized that part of what was going on at the border was that new rules were going into effect. I expect that the new tariffs imposed by the US and retaliatory tariffs imposed by Canada won’t be an issue for us because both countries have de minimus rules. There is a specific value of goods that an individual can import without incurring import duties.
De minimus is a legal term by which a law enforcement system or court does not consider trifling matters. The term comes from a Latin expression that means “pertaining to minimal things.”
The original Smoot-Hawley Tariffs, passed in 1930, had no de minimus exception. In 1938, as part of the recovery legislation of the Roosevelt administration, Congress amended the act to make a formal de minimus exception of $1. In 1978, that amount was raised to $5. It has been going up ever since. The most significant change occurred in 2016 when the amount was raised from $200 to $800 under a law whose primary sponsor was US Senator John Thune of South Dakota. The rule change was made to encourage the direct importation of items from countries of origin. The result of the rule change was dramatic in its impact. Companies regularly importing goods into the United States could now ship an item valued at less than $800 directly to a consumer without incurring import fees. Large companies in other countries, such as China, began shifting from importing goods in large shipping containers with high values to shipping individual packages directly to consumers.
Having vast amounts of inexpensive consumer goods, clothing, and other items directly shipped to consumers has put an enormous strain on the U.S. Postal Service. Instead of goods entering the US at shipping terminals, being processed with fees paid, and then shipped in bulk to stores, many goods are shipped directly to consumers in small packages. Chinese e-commerce giants SHEIN and Temu relied on this exception to ship inexpensive goods directly to US consumers. This is not a tiny part of the economy. Those two companies ship hundreds of millions of packages.
De minimus rules have been one of the most significant factors in the devastating decline of the domestic textile industry. They have also allowed hundreds of millions of packages to enter the country without inspection, facilitating the illegal drug trade.
This week, imposing new tariffs has caused much confusion about de minimus rules. The President issued an executive order suspending de minimus amounts for Canada, Mexico, and China, another allowing for de minimus exemptions, and more confusing orders.
The customs and border patrol agents we see when we cross into and out of Canada are a small part of what is required to enforce import and export rules. A complete suspension of de minimus for a single country, China, for example, would require a massive increase in the number of the agents needed to inspect packages and likely would result in long delays in delivering goods. US Customs and Border Protection is unprepared for the deluge of packages, and US ports of entry are overwhelmed with a backlog of packages. Bonded warehouses are filled with goods that can be stored pending inspection.
The rules are even more complex. Goods can be imported by three customs processes: formal entry, informal entry, and de minimus. The complex rules create significant confusion at US ports of entry, especially those where goods are transferred. We can see the difference by comparing the two border crossings in our town. The freeway, where private cars come and go, has very short lines with wait times under five minutes. At the same time, at the other entry, where the semi-trucks hauling goods enter, the lines are backed up enough to block intersections in town with wait times as high as 45 minutes.
This is only the first week, and one supposes that some of the confusion will settle with experience, but Congress is considering several potential changes to the rules.
We live in a world economy. Attempts at protectionism can have unintended consequences. Eliminating the de minimus exemption will affect consumers at the lowest economic levels. The result is expected to increase the gap between the rich and the poor in our country and the number of people who cannot afford essential goods and services.
If this essay sounds confused, it is because I am confused. And I’m not the only one. Meanwhile, I try to listen carefully and answer truthfully when we cross the border, and I have no plans to make a shopping trip to bring items home from Canada anytime in the near future.
