Teddy bear factory in Lianyungang, in eastern China’s Jiangsu province, on Nov. 22, 2024.
If you’re tempted to buy kids’ toys at rock-bottom prices online this holiday season, consumer advocates want you to think twice — and maybe three times. That $8 gift might not meet U.S. safety standards that are meant to protect kids.
“A lot of folks think that just because something is for sale, it must be safe,” Teresa Murray of the Public Interest Research Group consumer watchdog tells NPR. “And that is incredibly wrong.” (...)
How are cut-rate items reaching U.S. homes?
“When you buy a toy or any other product online and it’s shipped directly to you from another country, it generally doesn’t get inspected before it gets to your mailbox,” Murray writes in PIRG’s Trouble in Toyland report for 2024.
Items are more likely to avoid scrutiny, Murray says, if they’re sent under what critics say is a loophole in U.S. law. It’s the same one that online retailers have used to send cheap clothes to the U.S. — and that smugglers use to ship fentanyl and counterfeit drugs to the U.S. For toy sellers, the strategy helps foreign businesses undercut U.S. retailers and dodge safety requirements.
The law is called de minimis. While that name implies something small, it’s a big deal. Since 2014, the number of shipments entering the United States under the de minimis exemption each year rose from 140 million to 1 billion in 2023, according to the White House. They now account for most of the cargo entering the U.S., according to U.S. Customs and Border Protection, and the flood is only increasing. The agency is processing some 4 million de minimis shipments every day. (...) [ed. emphasis added]
“When you buy a toy or any other product online and it’s shipped directly to you from another country, it generally doesn’t get inspected before it gets to your mailbox,” Murray writes in PIRG’s Trouble in Toyland report for 2024.
Items are more likely to avoid scrutiny, Murray says, if they’re sent under what critics say is a loophole in U.S. law. It’s the same one that online retailers have used to send cheap clothes to the U.S. — and that smugglers use to ship fentanyl and counterfeit drugs to the U.S. For toy sellers, the strategy helps foreign businesses undercut U.S. retailers and dodge safety requirements.
The law is called de minimis. While that name implies something small, it’s a big deal. Since 2014, the number of shipments entering the United States under the de minimis exemption each year rose from 140 million to 1 billion in 2023, according to the White House. They now account for most of the cargo entering the U.S., according to U.S. Customs and Border Protection, and the flood is only increasing. The agency is processing some 4 million de minimis shipments every day. (...) [ed. emphasis added]
What is de minimis?
The de minimis exception started as a way to let travelers and businesses avoid tax and import duty requirements when shipping items of little value.
About 100 countries have de minimis thresholds; the amounts differ around the world. In the European Union, shipments worth less than 150 euros (about $160) can qualify. The U.S. level used to be $200, but in 2016 it rose to $800 — among the highest in the world — when then-President Barack Obama signed the Trade Facilitation and Trade Enforcement Act.
Companies that focus on the de minimis exclusion use it as a duty-free pipeline to the U.S. — and they can pay less taxes than an American company selling a similar product.
The rule is part of the success of retailers like China’s Temu, which bases its business model on streamlining the connection between manufacturers and consumers.
The de minimis exception started as a way to let travelers and businesses avoid tax and import duty requirements when shipping items of little value.
About 100 countries have de minimis thresholds; the amounts differ around the world. In the European Union, shipments worth less than 150 euros (about $160) can qualify. The U.S. level used to be $200, but in 2016 it rose to $800 — among the highest in the world — when then-President Barack Obama signed the Trade Facilitation and Trade Enforcement Act.
Companies that focus on the de minimis exclusion use it as a duty-free pipeline to the U.S. — and they can pay less taxes than an American company selling a similar product.
The rule is part of the success of retailers like China’s Temu, which bases its business model on streamlining the connection between manufacturers and consumers.
Use — and abuse — of de minimis is growing
Unscrupulous exporters aggressively exploit de minimis. They wildly undervalue items, for instance, or list many items as a single shipment worth less than $800.
In one egregious case from last year, a disassembled helicopter was shipped from Venezuela to the seaport in Fort Lauderdale, Fla., under de minimis rules, described as “personal effects,” according to a recent Customs and Border Protection report.
Faced with screening a torrent of incoming packages and cargo labeled as de minimis, the CPSC says it works with the CBP to assess shipments’ potential risks, flagging those most likely not to meet U.S. requirements.
Bipartisan efforts push for change
Backers of de minimis say it keeps trade moving fluidly, at low costs to businesses and consumers. That includes John Pickel, senior director for international supply chain policy at the National Foreign Trade Council, who notes that de minimis shipments are subject to the same federal screening and enforcement requirements as higher-value shipments.
Pickel warns that putting new limits on de minimis would bring billions of dollars in harm, citing a recent working paper by researchers at Yale and UCLA that predicted doing away with de minimis would hurt low-income communities. But critics of de minimis say it harms those same communities by making it easier for unreliable and potentially dangerous products to reach them.
“De minimis is a loophole for cheap — and sometimes dangerous — Chinese goods,” says Sen. Bill Cassidy, R-La., in a statement to NPR. “Congress needs to protect U.S. consumers from harmful Chinese trade practices, for which de minimis is the most egregious of them all, and level the playing field for small businesses.”
by Bill Chappell, AK Pub Media/NPR | Read more:
Image: Teddy bear factory; STR/AFP via Getty Images/AFP
