De minimus small package customs exemption and Chinese "Reshippers" targeted by US Congress

[Ghoul]

Released by Congress a couple of weeks ago. Fentanyl is the focus but it's clear they've put a ton of effort into investigating how illicit substances of all types are sold and shipped from China to the US. The report below is fascinating.

TLDR: US's small package inspections are so lax it's become the primary destination in North America for fentanyl precursors from China, sent in small packages, which are then sent to Mexico.

Congress wants to change that, carefully scrutinizing all small parcels and going after the shipping companies that specialize in aiding exporters of illegal goods to the US get passed customs. (they mention they'll be able to collect lots of money in customs duties on the legal stuff, as well).

I don't see how this won't have a MAJOR impact on availability from Chinese vendors (or international vendors in general for that matter), but I'm all ears. Tell me why it won't.

From page 42:

"The United States should also reform its trade laws that enable illicit shipments of narcotics and employ additional trade and customs enforcement measures to restrict imports and punish violators.

Specifically, Congress should:

1. Pass legislation amending the Tariff Act of 1930 to reduce the de minimis threshold for duty-free shipments into the United States with particular focus on foreign adversaries, including the PRC. Approximately three million overseas packages arrive in the United States every day. Many fall under the current de minimis threshold of $800, resulting in the parcels receiving minimal inspection and not having to pay duties, taxes, or fees.

Fentanyl precursors and dangerous synthetic drugs currently enter the United States through these de minimis packages.

During the course of its investigation, the Select Committee heard from California state law enforcement that the current form of the de minimis exception leaves America so vulnerable to drug smuggling that cartels increasingly have PRC- sourced fentanyl precursors shipped first into the United States before smuggling them to Mexico. In other words, the current form of the de minimis exception makes the United States the most vulnerable nation in North America to this form of drug trafficking.

There is widespread bipartisan support for reforming the de minimis exception.

It would not only combat the fentanyl crisis and thus save lives, but also increase American competitiveness and help prevent the importation of goods produced with forced labor. Congress should enact appropriate reforms to address this vulnerability and support increased enforcement."


https://selectcommitteeontheccp.house.gov/sites/evo-subsites/selectcommitteeontheccp.house.gov/files/evo-media-document/The CCP's Role in the Fentanyl Crisis 4.16.24 (1).pdf"

 

[Blahblahblacksheet]

Thanks for this. Lesson of the day…beyond the fentanyl issues, don’t ever underestimate the power of Amazon and Eli Lily.

 

[songsofpyramids]

I don't see how this won't have a MAJOR impact on availability from Chinese vendors (or international vendors in general for that matter), but I'm all ears. Tell me why it won't.

I mean, you could argue this likely will have little to no impact like almost all their new initiatives to stop drug importation have little to no impact on the flow of drugs. What counter drug op can you think of that has ever made a substantial difference in the market? They’re still playing whack-a-mole with the darknets and now those are bigger than ever before too. Drugs are cheaper and stronger than ever despite thousands of crackdowns over the decades. This just seems like another drug war battle that drugs will win handedly imo.

 

[Ghoul]

I mean, you could argue this likely will have little to no impact like almost all their new initiatives to stop drug importation have little to no impact on the flow of drugs. What counter drug op can you think of that has ever made a substantial difference in the market? They’re still playing whack-a-mole with the darknets and now those are bigger than ever before too. Drugs are cheaper and stronger than ever despite thousands of crackdowns over the decades. This just seems like another drug war battle that drugs will win handedly imo.

While anything can be smuggled in to meet demand at a high enough price, the current situation is unique. The volume of packages from China increased so incredibly quickly, slow moving government had no chance of keeping up, allowing contraband to slip in among the flood of other stuff. There's a big difference between ordering today, on the clearnet no less, and having hear directly shipped to the end user with little concern of consequences.

I won't rehash the large number of motivations to get a tight grip on small packages, none of them being to stop the steroid trade, but it can, and will be done and putting an end to this direct seller to buyer route through the mail.

There are good reasons certain countries are subject to "no reship" or "no sale to" policies. Stricter enforcement and package volumes not overwhelming customs capacity to monitor them. From everything I've read, it's clear to me volume will be reduced, capacity will be massively increased (and funded by a $2 pack security fee).

Even poor little Mexico has improved customs and now so successfully intercepts packages from China, drug precursors are easier to mail to the US, smuggle into Mexico, then return across the southern border as finished product.

Steroids will still be available, of course, but I really doubt the variety, convenience, cheap price, and low risk will continue when they've got to be smuggled like cocaine, and not just mailed with the ease of some cheap junk from Temu..

 

[Ghoul]

Let me just add. I'll be very happy if I turn out to be completely wrong on this, and it's business as usual.

The India pharma scene just got a little taste over the last 4 months, with love letters going out left and right, forcing all vendors to modify shipping methods.