This article is written by Austin Garcia
Entry Type 86, a provision under the Section 321 de minimis rule, has become a focal point in discussions about U.S. import regulations. This entry type allows for the streamlined clearance of low-value shipments, which has facilitated the rapid growth of e-commerce by enabling faster delivery of consumer goods. However, this convenience also raises concerns about oversight and regulation. Entry Type 86 is directly connected to the de minimis rule, which is a U.S. customs regulation that allows for the duty-free importation of shipments valued at $800 or less. Specifically, Entry Type 86 is a streamlined customs entry process for these de minimis shipments. It was designed to facilitate the efficient clearance of low-value shipments under Section 321 of the Tariff Act of 1930, which is where the de minimis rule is outlined.
The House Select Committee reports a surge in de minimis imports from China to the US during fiscal years 2023 and 2024. However, the de minimis rule has its limitations. Over 485 million de minimis shipments have entered the US in FY24, a 53% increase from 2022. Astonishingly, 94% of all import transactions now enter the US through de minimis rules, accounting for 90% of illegal narcotics, agricultural goods, and counterfeit seizures by customs. The CBP data reveals an increase in total de minimis imports from 636.7 million in 2020 to 1 billion in 2023, and an estimated 705.1 million for mid-year 2024. However, the total de minimis value decreased from $67 billion in 2020 to $54.5 billion in 2023.
While de minimis exemptions can help reduce inflationary pressures by lowering costs and improving supply chain efficiency, the specific impact on inflation would depend on how the exemption is implemented and the broader economic context.
Chairman Gallagher criticized the data as an “exploitation of the de minimis exception” and called for urgent action from Congress. CBP reported intensifying its targeting and enforcement efforts to prosecute illegal customs practices, including enforcing de minimis compliance. The Select Committee’s statement reflects US lawmakers’ critical view of China-related imports and their impact on US domestic industries. Interested parties should monitor US actions relating to de minimis imports and assess potential changes on their business operations.
The U.S. de minimis threshold is one of the highest globally. In FY 2022, de minimis imports were 83% of total U.S. e-commerce imports. During 2018-20, the value of reported de minimis imports more than doubled, from $29 billion to $67 billion, coinciding with surging e-commerce demand during the COVID-19 pandemic. However, in 2021, import values fell to $40 billion.
China accounted for most U.S. Section 321 imports, with nearly two-thirds of the 2.3 billion shipments imported under Section 321 being sourced from China. Chinese e-commerce firms have exploited the high de minimis level and minimal inspections to increase U.S. market share. Critics argue that the program is a “loophole” allowing substantial tariff avoidance and underestimation of U.S. imports from China. Bipartisan legislation was introduced in 2023 to exclude non-market economies from benefiting from the Section 321 program.
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