President Trump has ended the policy of unilateral disarmament as China steals American trade secrets and dumps its products at below-market prices.
He is levying tariffs on China’s illegally subsidized industries while taking aim at outdated policies and corporatist handouts that aid and abet the communist régime and its enablers here at home.
One example is the International Postal Union treaty. President Trump announced the United States intends to withdraw from this obscure compact that has made it cheaper to ship a package from Beijing to New York than from LA to New York.
This was a massive subsidy to Chinese goods and companies like Amazon that import them.
But unfortunately, this is not the only way American taxpayers are footing the bill to make China and Amazon richer while driving American manufacturers and local stores into bankruptcy.
Here’s another little-known loophole that Amazon currently exploits – and hopes to expand.
The U.S. Customs service imposes a tax – a tariff or duty – on goods imported into the U.S. However, there is an exception. Under what’s known as the Section 321 de minimis rule, articles imported “by one person on one day” with retail value of less than $800 are exempt from customs duties.
If you go to Ireland and buy a sweater, you can ship it or pack it in your suitcase and bring it home duty-free. Everyone flying into the country receives a Customs declaration form that explains the exemption.
But this policy was written before e-commerce and the Internet existed, and hasn’t been updated since.
E-commerce giants now use this Section 321 exemption to avoid paying duties on goods. When you click the “Place Your Order” button on the Amazon site, as millions do every day, the imported goods you order enter the country duty-free. It’s as if Amazon had nothing to do with the transaction, since duty-free purchases must be made by “one person on one day.” Mitt Romney famously said “Corporations are people, too,” but in this case, Amazon is not a person.
The way it works now, Amazon will buy a container load of a product, cardigan sweaters, for example, from China for $100,000 and ship it to a “fulfillment center” warehouse just over the border in Mexico. The container-load of sweaters would normally have a 32 percent or $32,000 duty assessed on it.
As orders come in, Amazon breaks up the container into individual shipments, puts them all on a delivery truck and brings them into the U.S. duty-free. It avoids paying the $32,000.
But wait, there’s more. Amazon wants to expand the loophole wide enough to drive a $20 billion Brink’s truck through it. Here’s how:
There are over 200 so-called Foreign Trade Zones in the U.S. Amazon is preparing to lobby Congress and Customs and Border Protection (CBP) to change the law so any order under $800 shipped from a Foreign Trade Zone would qualify for duty-free treatment. Amazon would have its distribution centers declared Foreign Trade Zones.
Conservative estimates say this would cost the Treasury $20 billion on top of what’s already lost through the e-commerce loophole.
It’s outrageous; and even more outrageous, there’s a good chance Amazon will have its way.
Over the decades, under both Democrat and Republican administrations, Customs and Border Protection has seen its mission change from enforcing the border to facilitating the free movement of people and goods – especially goods – across the border.
The outside committees that advise CBP are made up entirely of global companies that make a fortune on imports. It’s like asking the caravan organizers to serve on an immigration advisory committee.
Outdated policies written for a pre-Internet world subsidize the China import lobby at the expense of the tens of thousands of workshops, factories and stores across our country that hire Americans and pay local taxes.
Amazon’s latest gambit would render our entire customs system null and void, and make Jeff Bezos and China even richer and more powerful.