The regulatory process to overhaul the de minimis exemption will commence before either Kamala Harris or Donald Trump take over as president, a former White House supply chain official said Friday.
Speaking on a Cart.com webinar, Tim Manning, former White House COVID-19 supply coordinator in the Biden-Harris administration, said he is "100% confident" the administration will issue a Notice of Proposed Rulemaking on the matter soon. The notice, or NPRM, is a document detailing an agency's plan for a particular problem or goal before being implemented as a final rule.
"I can't see a world where it happens before the election, but I would expect it's very likely to see an NPRM sometime through late November, maybe early December," Manning said.
Through the plan announced in September, the Biden-Harris administration wants to limit the types of products that can be shipped via de minimis, which exempts shipments of less than $800 from import duties and taxes. Goods the White House is targeting include those covered by Section 201, 232 and 301 tariffs, which would hike costs for companies reliant on low-cost shipping between the U.S. and China.
With Election Day on Tuesday and the next president slated to take office on Jan. 20, it's unlikely for the final rule on the de minimis changes to be issued before the end of the Biden-Harris administration, Manning said. The rule must clear several regulatory hurdles after the notice is issued.
Once the NRPM is published, a comment period of 30 to 60 days is provided for the general public to weigh in on the proposed rule. Assuming no comments led to significant changes in the proposal, the president and the Office of Information and Regulatory Affairs may review the draft of the final rule before it's published and implemented.
"There's really no knowing what either President Harris or President Trump would do with a proposed final rule once it gets through all of that," Manning said.
While the rulemaking process is likely to stretch into the early days of the next administration, Manning said there was still enough time for the current White House to issue a final rule before the next president takes over. However, it would require an aggressive timeline with an NPRM published by mid-November.
The Biden-Harris administration's goals could be advanced quicker if Congress passes de minimis reform legislation, which the White House encouraged when it announced its plan in September, Manning noted.
"They could pass the full body of all these reforms and get it signed well within the window of probably even drafting the proposed rulemaking," Manning said.
Regardless of when any de minimis changes take effect, time is of the essence for brands reliant on the exemption, Cart.com President Ilias Simpson said during the webinar. Adjusting a supply chain to avoid shipping from certain areas can be a months-long process, so companies should quickly implement a plan that weighs the implications of either Trump or Harris winning, he added.
"The last thing you want is to be in a situation where you kind of sat still, status quo, and then you end up having disruptions or delays and now you can't service your customer," Simpson said.
