US President Barack Obama yesterday signed a new trade act into law which, apart from modernising and speeding up the customs clearance process in the US, could help drive further growth in international e-commerce shipments to the country.
One of the main elements of the Trade Facilitation and Trade Enforcement Act is the provision to raise the de minimis duty-free threshold (of the value of goods) from US$200 to US$800 which industry research suggests could generate additional volumes of B2C cross-border traffic.
Earlier this month, both UPS and FedEx applauded the passing of the Act by US legislative bodies which has now become law. UPS described it as "critical legislation that modernises US Customs and Border Protection”.
The company's Global Public Affairs President Laura Lane remarked: “This legislation takes time and unnecessary cost out of cross-border trade and will broadly bolster the nation’s customs enforcement efforts. The bill includes important provisions such as raising the de minimis threshold from $200 to $800, which particularly benefits small and medium enterprises.
"Additionally, it codifies and improves the President’s Executive Order on International Trade Data System (ITDS) or the Single Window (one government at the border) program. Implementation of the ITDS is a priority for UPS as it would enable companies to electronically transmit, through a 'single window,' the data required by each of the US Government agencies to import or export cargo," Lane added.
For its part, FedEx said the "positive changes" in the Trade Facilitation and Trade Enforcement Act of 2015 were "significant," highlighting that all of its customers in the US will now be allowed to buy international items worth up to US$800 duty-free.
"With the tremendous increase in global e-commerce, this is good news for cross-border online shoppers in the US,” commented Raj Subramaniam, executive vice president, Global Marketing. “By quadrupling the threshold from US$200 to US$800, it will streamline the process and help get shipments to the U.S. cheaper and faster.”
FedEx Express' Managing Director, Legal, Trade & International Affairs, Ralph Carter, explained that before this bill, tourists returning from international trips could carry back up to US$800 of merchandise duty free. But if they shipped those exact same goods, only the first US$200 was duty free. "This bill fixes this anomaly," he said.
"This amounts to a huge tax cut for the millions of Americans who shop online for products from Paris to Peru. Having the new duty-free threshold at US$800, along with a simplified return process, will now make cross-border ecommerce cheaper, faster and more predictable," he commented.
