The head of the Consumer Product Safety Commission told NRF this month that President Donald Trump’s plan to end the “de minimis” exemption that allows small quantities of merchandise to be imported from China without tariffs or inspection will make it easier for his agency to protect consumers from unsafe products.
“The closing of the de minimis threshold, particularly with respect to Chinese goods, is going to result in frankly a goldmine of data that we're going to use to better target shipments coming into this country,” CPSC Acting Chairman Peter Feldman said.
“It means that CPSC can be in a position to more efficiently screen for high-risk goods making entry and it also means that we're going to be able to clear low-risk, non-violative shipments in a more efficient basis so that we're not in any way a bottleneck with respect to ecommerce and direct-to-consumer shipments.”
Feldman’s remarks came during an interview with NRF Chief Administrative Officer and General Counsel Stephanie Martz on the second day of the March 4-6 NRF Retail Law Summit. The annual online event for retail industry in-house attorneys, risk and compliance officers and human resources executives also featured sessions on issues including employment law, privacy, litigation risks, cybersecurity and artificial intelligence.
More than 1,200 attorneys and others participated in the summit.
The de minimis exemption allows consumers to order low-cost products via online platforms like Shein or Temu and have them shipped directly from overseas without tariffs and with minimal inspection requirements. Trump revoked the exemption for goods from China as part of a Feb. 1 executive order imposing a 10% tariff on Chinese products. While the tariff has since been doubled, the de minimis change was suspended a week later after millions of packages reportedly piled up at U.S. airports. Nonetheless, the de minimis exemption is still expected to be revoked once implementation can be arranged.
Feldman said the end of de minimis will be part of a “more muscular” CPSC approach “that recognizes the risk posed to American families by the flow of consumer goods from China and other countries that don’t recognize United States law and are consistent violators.” Children’s and infants’ clothing and products are a particular concern.
The number of items CPSC inspects coming into the country each day could jump from 30,000 to 1 million and there will be “throughput challenges” but “it’s certainly something that we’re able to adjust to,” Feldman said. The agency’s new “e-file” requirement that compliance certificates and other paperwork for imported products subject to U.S. safety regulations be submitted electronically should also help speed the entry process and avoid delays, he said.
While the 2023 INFORM Act requires online marketplaces to collect and verify information about online sellers regardless of de minimis, Feldman said it is “sometimes impossible” to bring lawsuits against Chinese companies that violate safety regulations, making “enforcement at the ports … a first line of defense” at keeping unsafe Chinese products out of the country.
On other issues, Martz told Feldman retailers are concerned about “hefty” fines imposed for selling recalled products and asked how the CPSC determines which cases result in fines and which result in voluntary compliance agreements.
Feldman said it is illegal for a retailer to knowingly sell any recalled product but “CPSC wants to reserve the highest penalty cases for the most egregious conduct cases where there’s clear evidence of delay or concealment with respect to a safety issue.” In addition, the burden of proof is on the CPSC to show not only that the sale occurred but “that the seller knew what they were doing was wrong.”
“When in doubt, report,” he said. “That’s been the agency’s longstanding guidance and the easiest way to put yourself on the safe side of a failure-to-report civil penalty.”
Explore the health of American consumers and the retail industry with leaders from major retail brands, prominent economists and consumer experts. Learn more and register to join.
Feldman said the CPSC tries to negotiate with manufacturers when issuing a recall so consumers can be given a replacement, repair or refund but that working with Chinese companies has been “particularly challenging” because “more often than not” the company is unreachable. Recalls were on track to reach a record in 2024, with 2,450 recalls affecting more than 580 million units issued in the first nine months of the year.
Feldman said the agency has had “limited success” in working with online marketplaces to implement recalls despite its determination that they can be considered distributors and required to comply. He blamed agency authority set by Congress in the 1970s that focused on bricks-and-mortar retail and domestic manufacturing and has not been adequately updated to reflect the emergence of online selling and global sourcing.