Category: Press Releases and Statements
NFTC Applauds Introduction of the U.S. Trade Leadership in the Indo-Pacific Act
WASHINGTON DC – In response to the introduction in the House of Representatives today of the “U.S. Trade Leadership in the Indo-Pacific Act,” National Foreign Trade Council (NFTC) Vice President for Global Trade Policy Tiffany Smith released the following statement:
“NFTC applauds the introduction today of the U.S. Trade Leadership in the Indo-Pacific Act and congratulates its bipartisan cosponsors.
“This legislation reflects strong, bipartisan support for consistent, durable and aggressive U.S. leadership that builds confidence with our allies in the region. Congress has an important role to play in signaling that the United States is committed for the long-term and will work to promote our economic security by deepening economic integration across the Indo-Pacific, creating new commercial opportunities for our companies, farmers, and workers.
“We hope the actions proposed by this legislation will help to inform policymakers about the risks to U.S. security and economic interests of inaction – or insufficient action – and spark more aggressive leadership that can deliver meaningful results for American businesses and workers.”
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About the NFTC
The National Foreign Trade Council (NFTC) is the premier business association advancing trade and tax policies that support access to the global marketplace. Founded in 1914, NFTC promotes an open, rules-based global economy on behalf of a diverse membership of U.S.-based businesses.
NFTC: NTE Report Gives “Free Pass” to Foreign Governments to Discriminate
WASHINGTON DC – In response to the release of the 2024 National Trade Estimate on Foreign Trade Barriers by the Office of the United States Trade Representative, National Foreign Trade Council (NFTC) President Jake Colvin released the following statement:
“USTR pulled its punches this year, undermining decades of bipartisan efforts to call out the full scope of trade barriers through its annual NTE report and giving a free pass to efforts by foreign governments to discriminate against American companies under a thin veneer of regulating in the public interest.
“Specifically, in failing to call out significant barriers to American e-commerce and digitally-enabled exports, the Biden Administration is wasting an opportunity to stand up for U.S. innovation and inviting discrimination against American companies and workers by our economic competitors.
“By refusing to catalog local content requirements and other key foreign trade barriers, USTR is also willfully ignoring its congressional mandate to identify ‘significant barriers’ to U.S. exports of goods and services, foreign investment and electronic commerce.
“The NTE report is the latest example of deeply misguided efforts by this USTR to erode the standards that have governed decades of aggressive U.S. Government advocacy on behalf of American businesses and workers. America’s global economic competitors cannot be allowed to stand up blatantly discriminatory policies that disadvantage U.S. companies under the pretense of legitimate regulation.
“Ultimately, this shortsighted pullback from our global trade advocacy will threaten American jobs and the U.S. tax base, as foreign competitors and adversaries from the EU to China feel increasingly emboldened to discriminate against a wide range of American interests under the guise of digital regulation, public health or the environment.”
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About the NFTC
The National Foreign Trade Council (NFTC) is the premier business association advancing trade and tax policies that support access to the global marketplace. Founded in 1914, NFTC promotes an open, rules-based global economy on behalf of a diverse membership of U.S.-based businesses.
NFTC Welcomes Addition of Turkey to Treasury Agreement on DSTs
WASHINGTON DC – National Foreign Trade Council (NFTC) Vice President for International Tax Policy Anne Gordon today issued the following statement in response to the U.S.-Turkey Joint Statement on a unilateral measures compromise:.
“We welcome the Treasury Department announcement that Turkey has joined Austria, France, Italy, Spain and the UK in agreeing to extend the standstill on Digital Services Taxes (DSTs).
“The success of the OECD process on digital taxation depends on the commitment of countries party to the process to hold off on any measures that might harm a global agreement. We urge other parties to this process to make similar commitments as the deadline for an agreement on Pillar One approaches.”
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About the NFTC
The National Foreign Trade Council (NFTC) is the premier business association advancing trade and tax policies that support access to the global marketplace. Founded in 1914, NFTC promotes an open, rules-based global economy on behalf of a diverse membership of U.S.-based businesses.
American Competitiveness Will Suffer from Tax Provisions in Budget
WASHINGTON DC – The National Foreign Trade Council (NFTC) Vice President for International Tax Policy Anne Gordon today issued the following statement in response to the President’s budget proposal for FY 2025 and accompanying Treasury Green Book:
“The President’s budget reflects the same short-sighted corporate tax proposals he presented at the State of the Union last week and in last year’s Green Book. These proposals continue to ignore the realities of how global businesses operate and would make it harder for American companies to create jobs and to compete abroad.
“We are concerned that this budget does not include any measures to remedy Congressional and business community concerns with the OECD global tax negotiation. Instead the Administration puts forth proposals that hurt American competitiveness and undermine our companies’ ability to keep jobs in the U.S., at the same time increasing the corporate tax rate to 28% accompanied by an increase in the corporate alternative minimum tax (CAMT) to 21% – a rate far above what the Administration negotiated as part of the global minimum tax agreement.
“We urge the Administration to consider instead policies that foster innovation, job creation and continued growth.”
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About the NFTC
The National Foreign Trade Council (NFTC) is the premier business association advancing trade and tax policies that support access to the global marketplace. Founded in 1914, NFTC promotes an open, rules-based global economy on behalf of a diverse membership of U.S.-based businesses.
NFTC Reactions to President Biden’s State of the Union Address
Washington D.C. – The National Foreign Trade Council (NFTC) today issued the following reactions to the President’s State of the Union address:
NFTC President Jake Colvin:
“While President Biden rightfully focused on the critical importance of America’s security alliances, he missed an opportunity to elevate the role of America’s commercial relationships and U.S. global economic leadership. Strengthening America’s trade and investment relationships with our allies is key to enhancing our national security and competitiveness.
“President Franklin Roosevelt once cautioned Congress that ‘blind economic selfishness in most countries, including our own, resulted in a destructive mine-field of trade restrictions which blocked the channels of commerce among nations.’ Instead of promising Congress that the United States would ‘use its influence to open up the trade channels of the world,’ as FDR once did, President Biden used this stage to promote import substitution and higher corporate taxes.”
Anne Gordon, NFTC Vice President for International Tax Policy:
“The President’s proposal to increase the Corporate Alternative Minimum Tax to 21% will harm the U.S. economy and the competitiveness of all U.S. businesses. The Biden Administration led the charge on a global negotiation to move countries toward a ‘fairer’ 15% minimum tax. If they turn their back and seek a much higher rate at home, U.S. companies will be at a comparative disadvantage that will make it impossible to compete in the global economy.
“As 2025 approaches and several Tax Cuts and Jobs Acts provisions expire, we should be looking at renewing or extending pro-growth tax policies that drive innovation and investment in the U.S. and drive American economic success.”
Jeannette Chu, NFTC Vice President for National Security Policy:
“The President has identified the need for additional foreign aid for Ukraine and Israel, underscoring the importance of preserving regional alliances and the current world order.
“While meeting the geopolitical risks and challenges brought about by strategic competition with China and continuing to thwart Russia’s illicit procurement of militarily critical dual-use goods are essential national security objectives, we must not let these goals undermine America’s competitiveness, without which national security is inescapably compromised.”
Tiffany Smith, NFTC Vice President for Global Trade Policy:
“It is disappointing that the President’s economic agenda left out any mention of trade policies that would create new opportunities for American businesses, farmers, ranchers, and workers to reap the benefits of reaching customers outside of the United States and working with like-minded allies to strengthen the global trading system.”
“The Biden Administration continues to embrace import substitution policies that the U.S. has long pressed our trade partners to avoid. Moving forward, it is important that the Administration implement these programs in a way that upholds our commitments to our trading partners through the World Trade Organization and our regional and bilateral trade agreements. Otherwise we risk retaliation against our exports and will lose opportunities for our companies to compete for similar opportunities in foreign markets.”
John Pickel, NFTC Senior Director for International Supply Chain Policy:
“The U.S. economy relies on vibrant and resilient global supply chains. For American companies – both big and small – to thrive, we must have clear, feasible policies that improve the ability of supply chains to serve consumers, industry, well-defined government objectives, and other actors that power the global economy.”
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About the NFTC
The National Foreign Trade Council (NFTC) is the premier business association advancing trade and tax policies that support access to the global marketplace. Founded in 1914, NFTC promotes an open, rules-based global economy on behalf of a diverse membership of U.S.-based businesses.
Major American Business, Manufacturing, Tech, and Logistics Associations Call for Improving, Not Degrading De Minimis; Correct the Record on Widespread Misinformation
Groups representing U.S.-based businesses of all sizes urge the Administration to “consider practical, innovative ways to improve de minimis without increasing costs for consumers and small business.”
(Washington, D.C.) – A group of diverse American industry associations across business, manufacturing, tech, and logistics today sent a letter to the White House that outlines the consumer, inflationary, small business and exporting impacts of rolling back the de minimis tax exemption. The letter also addresses widespread misinformation on this longstanding pillar of international trade policy. The letter comes as the Administration and Congress consider potential approaches to changing the de minimis policy that was last affirmed on a bipartisan basis by Congress in 2016.
“De minimis has benefitted thousands of American small businesses across all sectors,” the organizations write. “It has also made purchasing goods online more affordable and accessible for consumers at a time of inflation and supply chain challenges. The average value of a de minimis package is roughly $50. If de minimis were to be eliminated or significantly degraded, that average $50 package could double in price without enhancing law enforcement at our borders.”
The associations lay out concrete steps in the letter that Congress and the Administration can take to improve de minimis without increasing costs for the American people, among other negative consequences.
“We remain eager to work with the Administration and Congress in developing legal authorities to better address non-compliance by a small number of bad actors who jeopardize our economic security, whether in the de minimis environment or other entry points. Improving de minimis offers a practical way to grow e-commerce, while keeping prices affordable and strengthening enforcement. Eliminating this tax exemption will undoubtedly create new inflationary pressure, strain the same agency charged with protecting our borders and ports, slow supply chains, and deliver a massive tax hike on the American people.”
The letter was sent by the following organizations: Consumer Technology Association, Express Association of America (EAA), National Association of Manufacturers, National Foreign Trade Council, TechNet, and the U.S. Chamber of Commerce.
The full text of the letter can be found here (pdf):
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March 6, 2024
The Honorable Jacob J. Sullivan
Assistant to the President for National Security Affairs
Executive Office of the President
Washington, DC 20500
The Honorable Lael Brainard
Director, National Economic Council
Executive Office of the President
Washington, DC 20500
Dear National Security Advisor Sullivan and Director Brainard:
On behalf of U.S.-based businesses large and small, we are writing to urge you to protect an essential component of America’s economic health and supply chain efficiency: de minimis treatment of low-value goods entering the U.S. The de minimis tax exemption permits shipments valued under $800 (per person, per day) to enter the United States free of duty and taxes. These shipments are subject to U.S. laws and information requirements that enable effective enforcement at the border.
De minimis has benefitted thousands of American small businesses across all sectors. For example, de minimis allows businesses to obtain inputs for domestically manufactured products into the United States more efficiently and with fewer unnecessary administrative requirements. It has also made purchasing goods online more affordable and accessible for consumers at a time of inflation and supply chain challenges.[1]
Further, many countries around the world have adopted de minimis thresholds to reduce costs for their consumers, promote competitiveness of small business, and avoid overburdening border officials who would otherwise be tasked with collecting small amounts of revenue. Products exported from the U.S. are subject to less red tape and enjoy duty free access to other countries when American exporters can utilize de minimis treatment abroad.
Recently, discussion around de minimis in Washington has included significant misinformation about the impact of de minimis on challenges we face in the United States. This letter is intended to ensure that the Biden-Harris Administration is equipped with the necessary data and facts that balance this important policy discussion.
Impact on the American Consumer and Inflation
Eliminating de minimis is the equivalent of a tax hike that would disproportionately impact small business owners and low-income consumers[2] who purchase affordable goods online. The average value of a de minimis package is roughly $50. If de minimis were to be eliminated or significantly degraded, that average $50 package could double in price, without enhancing law enforcement at our borders, after seeing a processing fee of $31.67 [3] and a brokerage fee of $20 upon entering the United States. The typical package, therefore, could see cost increase of over $50 in addition to the duties owed. As a result, a $50 delivery could become a more than $100 delivery. This added cost would feed inflation in the form of a massive, regressive tax hike on American consumers, the overwhelming majority of whom have a household income under $400,000.
Export Competitiveness
De minimis treatment of low-value shipments by international trading partners improves the competitiveness of American businesses by reducing transaction costs, giving American exports duty free access to those markets, and expediting speed to access other markets. Congress recognized this benefit when it encouraged federal agencies to pursue increased de minimis levels in other countries as an objective of U.S. trade policy.[4] Restricting the use of de minimis treatment in the U.S. would likely trigger changes in the 88 other countries with de minimis policies, increasing costs for American exporters.[5] For example, the European Union is expected to consider legislation that proposes to end duty free treatment for de minimis entry if adopted. Degrading de minimis in the U.S. is likely to encourage our trading partners to follow suit, resulting in American exporters paying more to sell their products in other countries.
Textile products, in particular, would be significantly impacted by such a potential race to the bottom related to de minimis. According to the U.S. Department of Commerce and the U.S. International Trade Commission, U.S. exports of fiber, textiles, and apparel totaled $34 billion.[6]
Forced Labor
Some have argued that de minimis provides a path for items made using forced labor to enter the U.S. There is no evidence that illegal products are more prevalent in de minimis shipments. As one CBP executive said last year: “There’s a misconception that we don’t target or screen de minimis — it’s not true. People throw around the phrase ‘loophole.’ It’s not a loophole. De minimis is not a loophole.”[7]
The administration, Congress, and industry must work together to rid forced labor from global supply chains. To do so we need to prioritize facts. As U.S. Customs and Border Protection (CBP) has pointed out[8] on several occasions, de minimis shipments undergo targeting and screening[9] that enforce the provisions of the Uyghur Forced Labor Prevention Act regardless of the value of the goods. The plain truth is the same risks for the importation of products made with forced labor exist across all import methods.
Fentanyl
Some have blamed the fentanyl crisis on de minimis. As government enforcement statistics make clear[10], the overwhelming majority of fentanyl enters the United States in large shipments from Mexico. These shipments are smuggled in passenger vehicles, by pedestrians, and concealed in truck shipments. De minimis packages, on the other hand, arrive in the United States overwhelmingly by air transportation throughout the country.
The CBP data tool released in August 2023[11] to track fentanyl seizures shows that 99% of fentanyl seizures were on the southern land border, which is not a significant channel for de minimis shipments. Further, in FY 2024, CBP is projected to seize roughly 1.2 billion doses of fentanyl. Only 3% of those doses will come via air cargo.[12] As the Peterson Institute recently noted: “the logic of banning de minimis parcels as a solution for the fentanyl crisis is on par with the logic of banning automobiles in Michigan (population 10 million) as a solution for national auto deaths (some 43,000 in 2022 in a population of 334 million).”[13]
As the administration works to stop the flow of fentanyl and other illicit drugs, we need serious policy solutions addressing the actual methods by which illicit narcotics are coming into the country. Fentanyl is a devastating crisis that must be met with real solutions.
Burdening Our Supply Chain and Border Enforcement Capabilities
Some have suggested that the increase of de minimis shipments has strained enforcement capabilities. However, degrading de minimis and routing one billion shipments into more resource intensive processing streams would require tens of thousands of CBP personnel to process information that is not related to enforcement and collect duty, rather than spending that time on activities that would actually interdict illicit items.
Degrading de minimis would not “shrink the haystack” of illicit shipments. It would simply “squeeze the balloon”, moving one billion de minimis packages to more cumbersome entry processes or the postal environment which includes less data than other means of de minimis entry. This would do nothing to address fentanyl enforcement while significantly increasing the cost of the average de minimis shipment for American small businesses and consumers and slow movement of supply chains.
Furthermore, the influx of volume into these other entry processes would slow the movement of supply chains while border officers scramble to process shipments and collect duty, instead of increasing the effectiveness of enforcement operations.
Improving Administration of De Minimis
CBP currently receives manifest data (such as the sender, recipient, value, and description of the goods) on de minimis shipments before they arrive at ports and already has clear statutory authority to require additional information to base enforcement decisions. In fact, CBP has just announced it will use its authority to require information related to de minimis shipments in the context of the entry type 86 test referenced below to require data before goods arrive to receive facilitative release of cargo. According to CBP, approximately 55% of de minimis entries in 2023 came in through the type 86 process. The Administration could take concrete steps, described below, to build on existing enforcement of U.S. trade laws at the border by separating the vast universe of compliant shipments from the few illicit packages.
First, CBP has been working toward the publication of a Notice of Proposed Rulemaking that would ultimately formalize ongoing tests that require additional information on many low-value shipments. This rulemaking should proceed to clearly articulate the findings of the long-running tests, link information to well-defined government needs, and provide ample opportunity for comment from the broad universe of interested stakeholders.
Second, CBP should identify and close information sharing gaps in providing trade data to federal agencies with regulatory responsibilities related to the broader entry process, including de minimis.
Third, government processes must employ a more “future-proof” approach to accommodate constantly shifting supply chains and business models. CBP and other government agencies should identify ways to use publicly available information and emerging technology (e.g., artificial intelligence, distributed legers, advanced label readers, etc.) to validate data received across cargo environments, including de minimis, and more efficiently focus constricted enforcement resources.
Finally, we represent responsible members of industry and trade community who partner regularly with government entities to promote compliance with U.S. trade laws, security requirements, and the promotion of resilient supply chains. We remain eager to work with the Administration and Congress in developing legal authorities to better address non-compliance by a small number of bad actors who jeopardize our economic security, whether in the de minimis environment or other entry points.
Improving de minimis offers a practical way to grow e-commerce, while keeping prices affordable and strengthening enforcement. Eliminating this tax exemption will undoubtedly create new inflationary pressure, strain the same agency charged with protecting our borders and ports, slow supply chains, and deliver a massive tax hike on the American people.
We urge the Administration to consider practical, innovative ways to improve de minimis without increasing costs for consumers and small business. Particularly at a time when President Biden has made clear that he is doing everything in his power to lower everyday costs for hard-working Americans, the administration should reject efforts to roll back a provision that Congress expressly enacted to facilitate trade and support consumers and businesses.
Sincerely,
Consumer Technology Association
Express Association of America (EAA)
National Association of Manufacturers
National Foreign Trade Council
TechNet
U.S. Chamber of Commerce
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[1] Horowitz, Gabe (2022) Reducing the Red Tape Around Supply Chains. Third Way https://www.thirdway.org/report/reducing-the-red-tape-around-supply-chains
[3] https://help.cbp.gov/s/article/Article-334?language=en_US
[4] Trade Facilitation and Trade Enforcement Act of 2015, Pub. L. No. 114-125, 130 STAT. 223 (2016) https://www.congress.gov/114/plaws/publ125/PLAW-114publ125.pdf
[5] https://www.trade.gov/de-minimis-value
[6] http://www.ncto.org/wp-content/uploads/2023/03/2022-Exports.jpg
[9] https://www.cbp.gov/trade/basic-import-export/e-commerce/faqs
[10] https://www.cbp.gov/newsroom/stats/drug-seizure-statistics
[11] https://www.cbp.gov/newsroom/stats/cbp-drugs-dosage-value-and-weight
[12] https://www.cbp.gov/newsroom/stats/cbp-drugs-dosage-value-and-weight
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About the NFTC
The National Foreign Trade Council (NFTC) is the premier business association advancing trade and tax policies that support access to the global marketplace. Founded in 1914, NFTC promotes an open, rules-based global economy on behalf of a diverse membership of U.S.-based businesses.
NFTC VP: It’s Time to Look Past the WTO’s Consensus-Based Approach
WASHINGTON DC – National Foreign Trade Council (NFTC) Vice President for Global Trade Policy Tiffany Smith today issued the following statement following the conclusion of the World Trade Organization’s (WTO) 13th Ministerial Conference in Abu Dhabi:
“The outcomes announced at the conclusion of last week’s WTO 13th Ministerial Conference in Abu Dhabi came together just in time to quell prognostications that the WTO and the rules-based trading system are on the brink of collapse. We congratulate WTO Director-General Ngozi Okonjo-Iweala and the United Arab Emirates for their leadership.
“While the vast majority of members were constructively engaged, it was frustrating to see, once again, that a small handful remain set on blocking greater progress, even on issues with broad developing country support like the Investment Facilitation for Development initiative. Dealing with this behavior once again underscores the need to find alternatives to the consensus basis approach so the WTO can advance outcomes on shared 21st century challenges like sustainability and digital trade.
“Ultimately, members delivered on the most urgent outcome on the agenda: an extension of the customs duty moratorium on electronic transmissions for two more years. In recognition of the tremendous opportunity that access to the digital economy provides to all people, the vast majority of WTO members, including unprecedented numbers of developing countries, actively supported this extension.
“Importantly, members did not expand the scope of the Trade Related Aspects of Intellectual Property Rights (TRIPS) waiver for COVID-19 vaccines to additional diagnostic and therapeutic products. While that is a relief for innovative industries, it is only temporary, and we must continue to push back on efforts to weaken intellectual property protections under the TRIPS Agreement on other fronts, including on existing discussions on future pandemic preparedness, technology transfer, and sustainability.
“We applaud the progress made on a range of other important issues, including fisheries subsidies and agriculture. A lack of final agreement on these issues and a decision to take additional time to get them right should not be viewed as a failure.
“We are heartened by the momentum coming out of the Ministerial for dispute settlement reform. It is absolutely critical for members to build on the significant work that has been done to date and finalize an agreement on the remaining issues and restore confidence in the system.
“Global businesses need to see that the WTO can uphold the international trading system by enforcing its rules and holding to account those who fail to follow them.
“U.S. leadership will remain critical to the future direction of the WTO. We encourage the Biden-Harris Administration to vigorously promote the interests of American companies at the WTO on issues from digital trade to IP to agriculture, and to intensify efforts to build consensus on a package of reforms that can be agreed to by the end of the year.”
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About the NFTC
The National Foreign Trade Council (NFTC) is the premier business association advancing trade and tax policies that support access to the global marketplace. Founded in 1914, NFTC promotes an open, rules-based global economy on behalf of a diverse membership of U.S.-based businesses.
NFTC Statement on the Extension of the Standstill on European Digital Services Taxes
WASHINGTON DC – National Foreign Trade Council (NFTC) President Jake Colvin today issued the following statement in response to the announcement of an extension of the Agreement on the Transition from Existing Digital Services Taxes (DSTs) to a New Multilateral Solution under the G20/OECD Inclusive Framework between the United States, Austria, France, Italy, Spain, and the United Kingdom.
“We applaud the Treasury Department negotiators for their work with the Governments of Austria, France, Italy, Spain, and the United Kingdom to continue the standstill on DSTs and avoid the need for retaliatory actions stemming from U.S. 301 investigations.
“We hope over the next few months the Inclusive Framework can continue their discussions and produce a viable Pillar One agreement. We urge the Treasury Department to consider the input from the business community and Congress as they work to finalize the Multilateral Convention.
“It is troubling that Canada continues to move ahead with plans to implement a DST instead of focusing on the successful conclusion of the OECD process.”
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About the NFTC
The National Foreign Trade Council (NFTC) is the premier business association advancing trade and tax policies that support access to the global marketplace. Founded in 1914, NFTC promotes an open, rules-based global economy on behalf of a diverse membership of U.S.-based businesses.
