I'm not sure this is a reasonable conclusion, just by nature of the fact that the majority of the packages targeted by the De minimis executive order are textiles and apparel, basically low value items for which there is little margin.
The types of shipments we receive don't necessarily qualify as low-value and while the margins may be low, there is plenty of room to increase it as necessary to work around the evolving set of rules. As an example, I once imported a carbon fiber bike frame from China. It was labeled as "cosmetics" and some small duties were paid, entirely bypassing the de minimis exemption.
Whatever technology that gets deployed to make a distinction between a carbon fiber bike frame and "cosmetics" without opening the box will take some time to roll out, presuming it is ever successfully implemented.
So, sure, there is some risk that things will change, but I don't think we can say with much certainty to what degree and on what timeline. So, sure, stock up, but I think it's more likely than not that if things do become more difficult, they will do so gradually and likely sporadically as new interventions get implemented and importers find work arounds.
The technology is secondary to a simpler, much more effective tactic.
Again, what's made it so much easier for contraband to get into the US was the incredible rise in volume of packages from China, 5 million a day at this point. These illicit goods are easily hidden among logistics company containers of tens of thousands of small parcels. The "Type 86" de minimus exemption allows 99.9% to bypass tariffs and customs inspection, as long as they're declared to be below $800 and addressed to an individual.
Each package's contents, value, shipper and recipient must be declared and provided to customs electronically.
Inaccurate declarations can result in the logistics company being suspended, costing them millions of dollars a day.
Inaccurate declarations have been rampant for years. Finally, to give these companies a taste of what's to come, after several random inspections, false declarations were quickly identified and 6 companies suspended.
In the future, a single parcel of contraband found among the thousands of legitimate goods can trigger a $250,000 fine per incident, in addition to. a suspension.
These companies will simply no longer risk massive losses by accepting packages from vendors of shady goods. Legit Chinese merchants won't risk being blacklisted and left unable to ship to the US by allowing misdeclared contraband being sent along with their goods.
Gear vendors represent a minuscule amount of the business logistics companies do, and continuing to turn a blind eye would cost them dearly. The pain thats going to be inflicted is just not worth it.
That will force gear to be shipped some other way, and that's going to make things much more difficult, expensive, and likely riskier than it is now.
For a comparison, India doesn't have a similar shipping infrastructure in place, and seizures are routine. When was the last time you heard of a China shipment being seized? It's very rare. That's going to change as they won't be able to hide their goods in the massive flow of de minimus containers packages any more.
Chinese contraband sellers have already been finding themselves banned from various logistics companies, who've felt it necessary to inspect packages so they don't end up on the hook for punishment. As enforcement continues to tighten, they'll lose access to this customs inspection bypassing method of shipping altogether, and be forced to switch to using alternative methods that won't be nearly as easy to slip across the border as it is now.
www.sidley.com
"CBP processed 134 million low-value shipments in FY 2015, compared with FY 2023, when CBP processed over 1 billion de minimis entries. That is a 646% increase in the number of low-value shipments entering the United States in eight years.7 CBP currently processes 4 million de minimis shipments per day.
The dramatic increase in the number of low-value shipments has created an opportunity for bad actors who take advantage of the unprecedent volume to introduce illicit substances such as fentanyl and other narcotics, counterfeits, and goods made with forced labor."
