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The argument was that grandma would be shipping you nice cookies and it'd be annoying if you had to pay tarriff on receive foodstuff. Temu is not grandma so th

The argument was that grandma would be shipping you nice cookies and it'd be annoying if you had to pay tarriff on receive foodstuff. Temu is not grandma so that's where the loophole comment comes from. It wasn't meant to be used large-scale commercially where you ship 100 small packages instead of 1 large package to avoid the tarrif.

Gracana 2y ago
Why was it set at $800 if it’s for grandma’s cookies?
- IG_Semmelweiss 2y ago
  It was an example. There's no need to be pedantic. $800 is a meaningful exception for personal use. If you want a turkish $400 rug or a $300 indian wedding dress, it was always meant to be for personal, not corporate, use. Can we agree that the law as it was intended was completely abused ? EDIT: for graphic language
  - Ekaros 2y ago
    Would paying extra 24$ on a 400$ rug be unreasonable when importing it? To me well it is a tax, but in the end not that significant one.
  - echoangle 2y ago
    > Can we agree that the law as it was intended was completely raped and abused ? Not really, is there a source for the rationale of the de minimis exemption?
  - dharmab 2y ago
    $800 was set out of desperation. CBP was overwhelmed and underfunded, so the executive increased the de minimis to significantly higher than any other country ti relive their workload. The proper solution would have been for Congress to increase funding to maintain a reasonable de minimis (many countries use around $50-200), but that wasn't happening.
    - IG_Semmelweiss 2y ago
      Spot on. But humans aren't perfect. So now we have to deploy a less than perfect solution. Doesn't make it wrong, its just flawed. (The likely result looks like CBP problems from before are coming back, correct? Curious on your take - has demand shifted since the rules were set ?)
      - dharmab 2y ago
        From talking to friends workings in imports and manufacturing, they expect what will happen is weeks or months of delay on most shipments as CBP is utterly unequipped to deal with the volume.
    - Propelloni 2y ago
      800 US $ is second highest, but not the highest limit around. Uzbekistan has a de minimis limit of 1000 US $ (yes, US $)
  - ipsin 2y ago
    Can we agree that the language of sexual violence is inappropriate in this context?
  - detaro 2y ago
    The last time congress changed the de minimus threshold, it gave the following context in the corresponding Act: FINDINGS.—Congress makes the following findings: (1) Modernizing international customs is critical for United States businesses of all sizes, consumers in the United States, and the economic growth of the United States. (2) Higher thresholds for the value of articles that may be entered informally and free of duty provide significant eco- nomic benefits to businesses and consumers in the United States and the economy of the United States through costs savings and reductions in trade transaction costs. (b) SENSE OF CONGRESS.—It is the sense of Congress that the United States Trade Representative should encourage other countries, through bilateral, regional, and multilateral fora, to establish commercially meaningful de minimis values for express and postal shipments that are exempt from customs duties and taxes and from certain entry documentation requirements, as appro- priate What exactly does suggest to you that this is intended for personal, non-commerce use?
dharmab 2y ago
No, the argument for de minimis is that the cost to collect taxes on a $20 parcel is less than the collected tax. Granted, the US' $800 de minimis, which was created because of a lack of funding to deal with the volume of shipping, was probably a bad decision in retrospect. But removing it entirely is another extreme.
- sarchertech 2y ago
  The issue is that when the law was crafted, it wasn’t feasible for foreign companies to directly sell to consumers at scale. The internet facilitated a direct to consumer model that allows foreign companies to almost completely bypass import taxes.
  - dharmab 2y ago
    The $800 limit was set during the Obama administration, well after internet direct to consumer sales existed.
    - sarchertech 2y ago
      Yeah but the scale wasn’t apparent yet. Normal people didn’t commonly order firstly from Ali express in 2015. If you look at the amount of de minimis goods shipped the year after the amount was raised vs today, they have increased over 10x. Also the pre 2016 limit was $200, still low enough to allow the temu business model.
      - Propelloni 2y ago
        The EU generally has a de minimis limit of 150 EUR for custom duties but individual members levy sales tax from the first EUR onward. The USA could do the same. Of course, this would make things more expensive, too, but less so than sinking your trade boat through tariffs ;)
echoangle 2y ago
So why wouldn’t you specify on the law that the sender has to be a private person, not a legal entity? If the law is that broad, I am struggling to see it as a loophole.
- IG_Semmelweiss 2y ago
  humans are not perfect. That's why it is called a loophole
- nonethewiser 2y ago
  Its semantic. Temu and Shein were exploiting the rule.
- sarchertech 2y ago
  When the law was crafted it wasn’t feasible for foreign companies to directly sell to individual consumers at scale. The new business model enabled by the internet and cheap/fast international shipping created a loophole that allowed companies to import billions of dollars of goods without paying any import taxes on them.

Gracana 2y ago

Why was it set at $800 if it’s for grandma’s cookies?

IG_Semmelweiss 2y ago
It was an example. There's no need to be pedantic. $800 is a meaningful exception for personal use. If you want a turkish $400 rug or a $300 indian wedding dress, it was always meant to be for personal, not corporate, use. Can we agree that the law as it was intended was completely abused ? EDIT: for graphic language
- Ekaros 2y ago
  Would paying extra 24$ on a 400$ rug be unreasonable when importing it? To me well it is a tax, but in the end not that significant one.
- echoangle 2y ago
  > Can we agree that the law as it was intended was completely raped and abused ? Not really, is there a source for the rationale of the de minimis exemption?
- dharmab 2y ago
  $800 was set out of desperation. CBP was overwhelmed and underfunded, so the executive increased the de minimis to significantly higher than any other country ti relive their workload. The proper solution would have been for Congress to increase funding to maintain a reasonable de minimis (many countries use around $50-200), but that wasn't happening.
  - IG_Semmelweiss 2y ago
    Spot on. But humans aren't perfect. So now we have to deploy a less than perfect solution. Doesn't make it wrong, its just flawed. (The likely result looks like CBP problems from before are coming back, correct? Curious on your take - has demand shifted since the rules were set ?)
    - dharmab 2y ago
      From talking to friends workings in imports and manufacturing, they expect what will happen is weeks or months of delay on most shipments as CBP is utterly unequipped to deal with the volume.
  - Propelloni 2y ago
    800 US $ is second highest, but not the highest limit around. Uzbekistan has a de minimis limit of 1000 US $ (yes, US $)
- ipsin 2y ago
  Can we agree that the language of sexual violence is inappropriate in this context?
- detaro 2y ago
  The last time congress changed the de minimus threshold, it gave the following context in the corresponding Act: FINDINGS.—Congress makes the following findings: (1) Modernizing international customs is critical for United States businesses of all sizes, consumers in the United States, and the economic growth of the United States. (2) Higher thresholds for the value of articles that may be entered informally and free of duty provide significant eco- nomic benefits to businesses and consumers in the United States and the economy of the United States through costs savings and reductions in trade transaction costs. (b) SENSE OF CONGRESS.—It is the sense of Congress that the United States Trade Representative should encourage other countries, through bilateral, regional, and multilateral fora, to establish commercially meaningful de minimis values for express and postal shipments that are exempt from customs duties and taxes and from certain entry documentation requirements, as appro- priate What exactly does suggest to you that this is intended for personal, non-commerce use?

dharmab 2y ago

No, the argument for de minimis is that the cost to collect taxes on a $20 parcel is less than the collected tax. Granted, the US' $800 de minimis, which was created because of a lack of funding to deal with the volume of shipping, was probably a bad decision in retrospect. But removing it entirely is another extreme.

sarchertech 2y ago
The issue is that when the law was crafted, it wasn’t feasible for foreign companies to directly sell to consumers at scale. The internet facilitated a direct to consumer model that allows foreign companies to almost completely bypass import taxes.
- dharmab 2y ago
  The $800 limit was set during the Obama administration, well after internet direct to consumer sales existed.
  - sarchertech 2y ago
    Yeah but the scale wasn’t apparent yet. Normal people didn’t commonly order firstly from Ali express in 2015. If you look at the amount of de minimis goods shipped the year after the amount was raised vs today, they have increased over 10x. Also the pre 2016 limit was $200, still low enough to allow the temu business model.
    - Propelloni 2y ago
      The EU generally has a de minimis limit of 150 EUR for custom duties but individual members levy sales tax from the first EUR onward. The USA could do the same. Of course, this would make things more expensive, too, but less so than sinking your trade boat through tariffs ;)

echoangle 2y ago

So why wouldn’t you specify on the law that the sender has to be a private person, not a legal entity? If the law is that broad, I am struggling to see it as a loophole.

IG_Semmelweiss 2y ago
humans are not perfect. That's why it is called a loophole
nonethewiser 2y ago
Its semantic. Temu and Shein were exploiting the rule.
sarchertech 2y ago
When the law was crafted it wasn’t feasible for foreign companies to directly sell to individual consumers at scale. The new business model enabled by the internet and cheap/fast international shipping created a loophole that allowed companies to import billions of dollars of goods without paying any import taxes on them.