Tim Manning, former White House COVID-19 supply coordinator, is confident that the Biden-Harris administration will issue a Notice of Proposed Rulemaking (NPRM) on the de minimis exemption overhaul before the next presidential term.
De Minimis Overhaul on the Horizon
The regulatory process to revamp the de minimis exemption, which exempts shipments of less than $800 from import duties and taxes, is set to kick off before the next presidential term, according to Tim Manning, a former White House supply chain official. Manning expressed his confidence during a Cart.com webinar, stating that the Biden-Harris administration is likely to issue a Notice of Proposed Rulemaking (NPRM) on the matter soon.
The NPRM and Its Implications
The NPRM is a document that outlines an agency’s plan for a specific issue or goal before it is implemented as a final rule. Manning anticipates the NPRM to be issued sometime in late November or early December. The Biden-Harris administration’s plan, announced in September, aims to limit the types of products that can be shipped via de minimis. The targeted goods include those covered by Section 201, 232, and 301 tariffs, which could increase costs for companies dependent on low-cost shipping between the U.S. and China.
The Road to Final Rule
Given the upcoming Election Day and the next president’s inauguration on January 20, Manning believes it’s unlikely for the final rule on the de minimis changes to be issued before the end of the Biden-Harris administration. The rule must clear several regulatory hurdles after the notice is issued. After the NPRM is published, a comment period of 30 to 60 days is provided for the public to weigh in on the proposed rule. The president and the Office of Information and Regulatory Affairs may then review the draft of the final rule before it’s published and implemented.
The Role of the Next Administration
While the rulemaking process is likely to extend into the early days of the next administration, Manning believes there’s still enough time for the current White House to issue a final rule before the next president takes over. However, this would require an aggressive timeline with an NPRM published by mid-November. The Biden-Harris administration’s goals could be expedited if Congress passes de minimis reform legislation, which the White House encouraged when it announced its plan in September.
Implications for Brands
Regardless of when any de minimis changes take effect, time is of the essence for brands reliant on the exemption, according to Ilias Simpson, President of Cart.com. Adjusting a supply chain to avoid shipping from certain areas can be a months-long process, so companies should quickly implement a plan that weighs the implications of either Trump or Harris winning.
