US CBP proposes sweeping changes to US imports

The US CBP (Customs and Border Protection) has announced a proposal on January 14th for sweeping changes to US imports.

At FlavorCloud Inc., we will be watching closely to see when they take effect and in what form to ensure we are fully compliant with our multi-carrier network and customers on all US imports real-time. As of January 20, 2025 Trump has multiple government agencies evaluating tariff impacts with reports outlining their full evaluations due back to him by April 1, 2025.

Reasons for change:

1. Border security & Consumer Safety: close the loop on current exemptions that inadvertently facilitate unlawful shipments of narcotics (including fentanyl), dangerous goods, counterfeits, and products made with forced labor into the borders.
2. Increased Revenue: If imports were subject to an ad valorem tariff as proposed under Section 232, 201 and 301 (which includes apparel, textiles), the total amount of additional revenue to be collected is between $5.9 billion and $7.8 billion in 2025. Additionally, these changes will impact the cost of processing helping CBP save money and process more efficiently. Of note: US CBP low value shipment (LVS) has grown from 139 million a year in Fiscal Year (FY) 2015, to over 1 billion a year in FY 2023.
3. Protect domestic industry: These trade or security actions are designed to protect domestic industries, and to address the harm to domestic industry and the American public and unreasonable or discriminatory trade practices, and may in turn encourage foreign governments to eliminate policies that gave rise to the action.

Implications:

1. 10 digit HS code is now requirement: To enable CBP to determine whether merchandise is eligible for the administrative exemption, CBP proposes to collect the 10-digit HTSUS classification as part of the basic as well as the enhanced processes, as described in the ELVS NPRM. Declarations in advance of arrival applies to both informal and formal clearance (type 01 or 11 entries, or the current Entry Type 86). Additional information on country of origin (manufacture) and understanding of end use are required.
2. De miminis changes: Changes were proposed to exemption for certain low value shipments (LVS). Specifically, CBP proposes to make merchandise that is subject to specified trade or national security actions ineligible for this administrative exemption. The proposed rules will remove goods subject to Section 201, 301, and 232 duties from eligibility for entry under the de minimis program or Section 321(a)(2)(C).
3. New ad valorem tariffs and fees: Under the proposed rule, importers are required to pay tariffs (ranging from 12-30%) on all goods subject to an ad valorem tariff pursuant to Section 232, 201, or 301. Some of these shipments are subject to *new* additional fees. Table below:

Additional Fees: In addition to tariffs, there are fees assessed on a per-shipment basis. These fees include brokerage, merchandise processing etc. and vary greatly by the carrier and service level choice as well as whether it is consolidation vs. individual shipment. This could be anywhere from $1 to $30 per shipment.