Transcripts
Welcome to Unboxing Logistics.
Speaker:I'm your host, Lori Boyer, and today we are going to be diving into a little bit of topic
Speaker:that we are all over in the news lately.
Speaker:We're going to be talking de minimis.
Speaker:I have brought on Kate Muth.
Speaker:She is the Executive Director of IMAG, and she's going to be talking to us about what's going on
Speaker:with de minimis, what are we seeing as of now, as we know, things are changing a lot with tariffs
Speaker:and de minimis and all of those good things.
Speaker:So this is going to be a great discussion for everyone.
Speaker:Kate, though, will you introduce yourself a little bit to our audience?
Speaker:Absolutely.
Speaker:I am Kate Muth.
Speaker:I am the executive director of the International Mailers Advisory Group or
Speaker:IMAG as most of us, most folks know us.
Speaker:I got my start in this industry maybe 30 years ago.
Speaker:I was a trade reporter actually, covered the Postal Service, covered the business of
Speaker:mailing and shipping for, for about 10 years.
Speaker:And then kind of moved over to the association side of the of the house.
Speaker:And so I've written on on postal and logistics topics for many years and really
Speaker:have found my home here in the international space, which I really enjoy have great
Speaker:members and as we're going to discuss today, there's always something new going on.
Speaker:There is always something new going on.
Speaker:In fact, this is a little sneak behind the scenes sort of peek here for our community.
Speaker:We actually had recorded this episode and we're re recording it because
Speaker:there have been changes since then.
Speaker:That's how quickly things do happen and things change.
Speaker:So giant shout out to Kate for doing coming back and sharing the latest updates with us.
Speaker:Kate.
Speaker:So as part of our season, we've been doing a couple of fun little segments that I have loved.
Speaker:One of them is what we call AI reality check.
Speaker:I'm just asking experts to give us a little bit of a grade.
Speaker:I'm asking ChatGPT a question that's kind of in your domain, and I'm letting you kind
Speaker:of grade and see how well did ChatGPT do.
Speaker:So far I have to say this season, kind of hitting a pretty good B, B+.
Speaker:So I, that's not bad, not bad.
Speaker:So, Kate, I have asked ChatGPT about what it thought were the biggest misses, the
Speaker:biggest failures in international mailing and shipping over the last five years.
Speaker:Okay?
Speaker:So it gave me three.
Speaker:Three top ones it feels like were the biggest, you know, oopsies.
Speaker:So I, I'm interested to hear what you say on what it said.
Speaker:So the first one it said was USPS's slow rollout of its international ecommerce.
Speaker:It said that while other carriers kind of expanded their international ecommerce
Speaker:aggressively, USPS struggled a little bit with its international delivery times, tracking, customs.
Speaker:Okay, so that was one.
Speaker:Two, it said Brexit.
Speaker:It said all of the shipping issues around Brexit caused a lot of chaos that was
Speaker:just really not thought through well.
Speaker:And three was China's de minimis loophole.
Speaker:Which, interestingly enough, is what we're gonna talk about.
Speaker:Kind of that surge in, in SHEIN and Temu and, and sort of the, the issues around that.
Speaker:So it listed those as the three kind of big misses in the last five years.
Speaker:Agree.
Speaker:Disagree.
Speaker:Where do you feel, Kate?
Speaker:I mean, I think certainly Brexit and the sort of impact that had because that really did
Speaker:go across the entire European Union, right?
Speaker:You're leaving the European Union.
Speaker:So it's not just what's going on in the UK.
Speaker:It's what the effect was for the European Union countries.
Speaker:And for those of us who were shipping to the UK when it was part of the EU, and now it's not.
Speaker:So right.
Speaker:I think that one's pretty good.
Speaker:It hit right on the target.
Speaker:I don't know about the Postal Service and international ecommerce.
Speaker:The Postal Service is just, I know the Postal Service is the largest, you know postal service
Speaker:in the world, post in the world, but they're very, they're not really that big in international.
Speaker:They really are quite small in comparison to La Poste, Deutsche Post.
Speaker:You know, BPost even.
Speaker:So smaller countries actually have a bigger presence in international ecommerce.
Speaker:So that one, you know, that seems a little niche to me.
Speaker:I totally agreed with that.
Speaker:I just had to say, Kate, I was like, really?
Speaker:Okay.
Speaker:So go on.
Speaker:So that one, I don't know about, but not to say Postal Service couldn't do more in
Speaker:international ecommerce, but it doesn't strike me as one of the biggest one of
Speaker:the biggest things for the last five years.
Speaker:I would say that, of course, the China and just the surge in ecommerce, not just
Speaker:into the U.S. but all around the world.
Speaker:And how customs authorities have had to adapt, make changes.
Speaker:You know, you've seen it not just here in the U.S. but other countries changing
Speaker:their value added tax, taking it down to zero or changing the duties and taxes
Speaker:that they put on goods coming from China.
Speaker:So I think, yeah, that one and just the rise of Temu and SHEIN I mean, they've grown so quickly.
Speaker:You see it in certain recent survey results that, you know, they were maybe just a blip
Speaker:a few years ago, and now they're, they're right up there with with Alibaba and Amazon.
Speaker:So, right.
Speaker:That's pretty remarkable.
Speaker:Okay.
Speaker:So what would you give it as its grade overall, A to F?
Speaker:Yeah, I think they got two out of three, right?
Speaker:And although that Brexit sort of a broad, sort of a broad target, I
Speaker:would give it maybe C plus, B minus.
Speaker:I agree.
Speaker:I agree.
Speaker:I didn't, I wasn't that impressed with its answer on this.
Speaker:So that's, that's an interesting sort of insight there as we get into some of these more complex
Speaker:topics, sometimes maybe too broad, too generic.
Speaker:It didn't go that well.
Speaker:So get, get your answers from people like Kate.
Speaker:Not like ChatGPT on things like this.
Speaker:Okay, exactly.
Speaker:Something else we've been doing this season is I've been asking people to share a
Speaker:person or multiple people or even a role of somebody you really admire in the industry.
Speaker:I've loved this topic.
Speaker:So, Kate, who is somebody who's influenced you or that you just really admire in the industry?
Speaker:You know, there's so many, and you always risk when you say name and you
Speaker:don't say another, but I'm going to say one name, which is Shoshana Grove.
Speaker:She is the CEO of International Bridge.
Speaker:She comes from she, she was a, worked at the Postal Service, she worked for
Speaker:the Postal Regulatory Commission, and now she's been CEO of International Bridge for
Speaker:maybe, I don't know, eight, nine years.
Speaker:So she's been on all sides of, of logistics, but you know, she is one of
Speaker:those people, as much as she knows, she's always a student of the of the industry.
Speaker:And she's kind of taught me that even when you think you know it all you know,
Speaker:there's still more to learn, but she's also a champion for women in, in logistics
Speaker:and, and in postal and in government.
Speaker:She is the chair, co chair of the Women in Logistics and Delivery
Speaker:Services, which is an organization that supports women in in our industry.
Speaker:And I think I mentioned this when we recorded last time, she knows everyone, but she's
Speaker:so welcoming to newcomers and she knows the best places in D.C. to have a meal.
Speaker:And she knows all of the restaurant, restaurateurs, so she's just a wonderful
Speaker:she's a friend, she's a colleague, and I just admire the, the heck out of her, so.
Speaker:I love it.
Speaker:In a way, it kind of connects the fact that she's an, an always learner.
Speaker:You know, she, she has her, this great base of knowledge, but she's always open to new ideas.
Speaker:It's similar in the way that you said, while she knows everybody, she also welcomes new people.
Speaker:It's interesting to see those two things.
Speaker:Basically, it's the same characteristic.
Speaker:And both help in the relationships and in the knowledge.
Speaker:So, fantastic.
Speaker:I love that.
Speaker:Shout out to her.
Speaker:Okay, let's get into the meat of our conversation.
Speaker:De minimis.
Speaker:Okay, so Kate, I'm here for it.
Speaker:First of all, if we have some, you know, maybe we've got some small ecommerce shipper
Speaker:and they're not quite aware of de minimis.
Speaker:What is de minimis?
Speaker:What does it mean when you're shipping things across borders?
Speaker:Right, so de minimis in that regard is essentially the value under which goods can come into the
Speaker:U.S. free of duties and without having to be, you know, through the formal entry process.
Speaker:And I'll just say something because we, you actually used a word earlier when we talked.
Speaker:I want to note that de minimis.
Speaker:It's called the de minimis exemption, so you're exempt from duties.
Speaker:And it's not loophole.
Speaker:It's actually a core U.S. trade policy.
Speaker:So it is it's it's, I know that gets thrown around a lot.
Speaker:You see it in headlines, but it's actually it's it's U.S. trade policy, and it's actually based
Speaker:on on sort of sound economic underpinnings that goods can be shipped quickly and affordably.
Speaker:You know, they can have something of a streamlined process for entry
Speaker:and that benefits U.S. businesses.
Speaker:It benefits the American consumer.
Speaker:And it includes those businesses that may be like a manufacturer that that gets their
Speaker:intermediary goods through from another country, comes into the U.S. and then and
Speaker:then it's manufactured here in the U.S. So.
Speaker:Great point.
Speaker:I just wanted to straight, say that because even when all of this was happening,
Speaker:with the tariffs and briefly losing the de minimis exemption you saw a lot of
Speaker:those headlines in the, in the papers.
Speaker:And so I just thought I would I would say that.
Speaker:No, I love that.
Speaker:So loophole gives us this impression that we over, it was an oversight, right?
Speaker:And that we somehow didn't know.
Speaker:But the exemption is this is specifically made out as part of our
Speaker:trade policy and makes a lot of sense.
Speaker:And I would assume then, Kate, countries throughout the world have their
Speaker:own de minimis exemptions, correct?
Speaker:So countries around the world, and we are a little bit of an outlier,
Speaker:the U.S. is because ours is so high.
Speaker:It's 800 dollars.
Speaker:So just to get back to the definition a little bit, it's anything coming into
Speaker:the U.S. to a single person or a single address one person, one day or one address
Speaker:one day, so it's anything under 800.
Speaker:And of course, in the ecommerce world you know, a lot of direct to
Speaker:consumer products, are way below 800.
Speaker:And so you've seen other countries have a de minimis, whether it's for duties,
Speaker:they may have two different ones.
Speaker:They may have one on their value added tax in the European Union, and then there's a
Speaker:separate slightly higher one for duties.
Speaker:Countries around the world have lowered their de minimis for some of the reasons
Speaker:we, we hit on at the very beginning, which is that so much has come in from China.
Speaker:And you know, there's other reasons too, there's economic reasons, there's protectionist reasons
Speaker:there's security reasons, it's, it's for a variety of reasons where people have set, or people,
Speaker:countries have set their de minimis levels, but in the U.S., ours is quite high, and I think
Speaker:that's probably why folks, you know, look at it sort of differently from, from what the rest
Speaker:of the world is doing, or has moved towards.
Speaker:Okay.
Speaker:So ours is 800.
Speaker:If we were comparing some of the other numbers, do you know offhand, you know,
Speaker:Canada or some of the EU or anything?
Speaker:Canada is 40 for taxes and 150 for duties.
Speaker:It's slightly lower through the postal channel.
Speaker:I think it's 20 for taxes into the European Union.
Speaker:It's, the value added tax is, is essentially zero.
Speaker:It's at the first euro you pay value added tax, but their de minimis
Speaker:on duties is not until 150 euro.
Speaker:And I think Mexico, I'm gonna get mixed up, I wanna say it's like 50.
Speaker:50 dollars.
Speaker:You know, some of that Mexico and Canada, of course, also are what's
Speaker:in the USMCA, in the NAFTA 2.
Speaker:0 agreement.
Speaker:So you know, again, countries can have bilateral agreements as well, or they can have, excuse
Speaker:me, trade agreements where that may be set.
Speaker:And then you have, like, places like Australia, New Zealand that have a goods and services
Speaker:tax, and they apply that the, the ship or the marketplace or the platform is the one who's
Speaker:responsible for collecting it and paying.
Speaker:And, you know, there's a threshold of revenue, like, say, 75,000 Australian dollars
Speaker:before you even have to collect and pay it.
Speaker:So, countries have all said it somewhat differently.
Speaker:They have maybe different mechanisms for, for applying it, but you know,
Speaker:yes, it's different around the world.
Speaker:Okay, so Kate, what kind of goods then are typically, if we're focused back on the
Speaker:United States, what type of goods typically do we see falling under this exemption?
Speaker:Are they really specific, you know, industries or types, or does it cross all the industries?
Speaker:I think it crosses a lot of industries, but I think you can find clues from you know,
Speaker:for instance, some of the surveys or IPC, the International Post Corporation does
Speaker:an annual cross border ecommerce survey.
Speaker:And it kind of ranks the what the most purchased online goods are.
Speaker:It's, you know, it's a survey of the consumers.
Speaker:And you see a lot of electronics, a lot of apparel you know beauty and makeup, goods like that.
Speaker:Certainly I see a lot of times as example, things like your your iPhone case or your
Speaker:phone case jewelry, you know, things like that.
Speaker:It's a lot of the stuff that we buy online.
Speaker:And maybe it changes a little bit year to year, but generally you see those handful
Speaker:of categories that are, are most common.
Speaker:And of course, when you think about Temu and SHEIN, a lot, the fast
Speaker:fashion is a big part of it as well.
Speaker:A lot of that's coming in, but really it's a whole lot of things.
Speaker:Anything a consumer can buy online, but not just that.
Speaker:It's also, as I said, if you're a business and perhaps you need something for your
Speaker:own manufacturing needs or your own production needs you know, that can come
Speaker:through the de minimis exemption as well.
Speaker:Okay.
Speaker:So then let's talk about it from that standpoint, what's going on with it.
Speaker:Interestingly, I had an experience.
Speaker:I went to get my hair done with my hairdresser, and she has a side business where she
Speaker:sells like balloons and that kind of stuff.
Speaker:And she mentioned that she had just been in a panic as a small business owner.
Speaker:But she gets all of her you know, mylar balloon things from Canada, and she was worried about some
Speaker:of these issues and some delays in the border as well as, you know, what was going to happen and
Speaker:was asking all these things, I don't know what's going on and what, how, what am I supposed to do?
Speaker:And is this going to ruin my business if this goes away?
Speaker:And she was asking me knowing I work in the logistics field.
Speaker:So I think that's kind of our audience for some of those people out there.
Speaker:What is going on?
Speaker:They're not sure what it is.
Speaker:Can you give us kind of a, an overview, what is sort of the climate of, of what's
Speaker:going on with de minimis when it comes to legislation, when it comes to President Trump,
Speaker:you know, what, what is the state right now?
Speaker:Well, that is you know, if I can answer that succinctly or on the nose, I can probably
Speaker:play the, you know, play the numbers or something, but well, there's so much going on.
Speaker:You're right.
Speaker:And it is tied in with the tariff situation because if you remember in
Speaker:early February, when the Trump administration put the tariffs, initially
Speaker:they're going to be on Mexico and Canada.
Speaker:Then we got a pause, but he did implement the additional 10 percent on on China.
Speaker:And initially, when those took effect, part of that executive order
Speaker:was you can no longer use de minimis.
Speaker:The de minimis exemption was going away.
Speaker:So everything that was coming in would pay duties and taxes and, and the and the new tariff.
Speaker:And so what happened of course was, I mean, that was turned out two or
Speaker:three days later that got turned on.
Speaker:And so that's just like way too suddenly.
Speaker:It overwhelmed CBP.
Speaker:We discovered that the postal channel briefly, the Postal Service briefly said we aren't
Speaker:going to take anything from China or Hong Kong because Postal Service doesn't really
Speaker:have a mechanism to collect duties and taxes.
Speaker:And there is also through the postal channel country of origin, that
Speaker:data element is not a requirement.
Speaker:It's just optional.
Speaker:So you can't even a hundred percent tell, you know, where it came from.
Speaker:So there was a lot, there were a lot of glitches right off the bat.
Speaker:And I think because it impacted and of course, then it was impacting small businesses.
Speaker:It was impacting big businesses.
Speaker:CBP was overwhelmed.
Speaker:We, one article said they got something like a million packages stacked up at JFK.
Speaker:So the president came out with an updated executive order and said, we will
Speaker:reinstate de minimis exemption until you know an effective mechanism for collecting
Speaker:the duties and taxes can be in place.
Speaker:And then the Commerce Secretary has deemed that that's acceptable.
Speaker:So we're still in that period of de minimis is still allowed.
Speaker:We've got the tariffs with Canada now on, on some things and some things with
Speaker:Mexico that aren't covered by the USMCA.
Speaker:And then there's, you know, retaliation.
Speaker:And we're going to have some expecting tariffs with the European Union in April 1st.
Speaker:So the de minimis piece of it, I believe at least with the European Union as well,
Speaker:will continue to have the de minimis exemption on things coming from the EU.
Speaker:Just because there are some of these sort of say technical aspects or practical
Speaker:aspects of it that have to be sorted out.
Speaker:I think that is still a work in progress.
Speaker:And there are two, so, one other thing to note is that there's two rulemakings that
Speaker:Customs and Border Protection has issued.
Speaker:They issued them in the, it was actually in the waning days of the Biden administration.
Speaker:They pushed out these two rulemakings that had been in the works for a number of years.
Speaker:And the first one is about you know, it's looking to secure ensure that
Speaker:illicit narcotics aren't coming through.
Speaker:To ensure that, you know, we're not allowing counterfeits, that people,
Speaker:it's really to protect the citizens.
Speaker:So one of the first one is to collect more data and kind of enhance the
Speaker:data elements that are being collected.
Speaker:And then a second rulemaking proposes eliminating de minimis on any goods
Speaker:that come what they're called section 301, Section 201 or Section 232 goods.
Speaker:And so these are goods that the first Trump administration put tariffs on.
Speaker:And the Biden administration kept it on them.
Speaker:So those were the first, and they're really just, those were just addressed mostly to China.
Speaker:Okay, so, so let me, I just want to make sure we're good.
Speaker:There were some concerns with de minimis that we were getting some narcotics,
Speaker:some security issues, some counterfeit items that were slipping under the radar.
Speaker:Correct?
Speaker:With the de minimis exemption.
Speaker:So they put on some additional rules to kind of help with that.
Speaker:And that was a data collection and eliminating on, on some of those specifics, the 301, 201, 232.
Speaker:Am I getting this right, Kate?
Speaker:You're getting it right, except they're proposed rules.
Speaker:So they're not actually in place.
Speaker:They're proposed.
Speaker:So I, and I hope I, maybe I didn't state that clear enough, but it's a notice
Speaker:of proposed rulemaking, which is the first step in the rulemaking process.
Speaker:And this is a little confusing, but the rulemaking process is actually the
Speaker:way that usually these things are done.
Speaker:It's not like we're gonna have a tariff tomorrow, and by the way, de minimis is gone.
Speaker:You know, that's, that's not usually how businesses adjust very well.
Speaker:So the rulemaking process is such that what has occurred is CBP, Customs and Border
Speaker:Protection, has put forward proposed rules.
Speaker:It has given we have until next week on the one rule to submit comments.
Speaker:So it's, it's.
Speaker:Okay.
Speaker:So what, do you have the date for that?
Speaker:March?
Speaker:March 17th, the comments are due.
Speaker:Just the comments are due for the data one.
Speaker:And for the one that's kind of, I refer to as the trade and national security one, which
Speaker:has really more to do with the de minimis exemption being removed on certain goods.
Speaker:That date is March 24th for the comments are due.
Speaker:And in the traditional rulemaking process, you submit, you know, it allows for
Speaker:interested parties, any stakeholder, for any citizen to submit comments.
Speaker:You can do it very easily online.
Speaker:There's already a bunch of comments that have been submitted.
Speaker:We'll submit ours in the next couple of days and and then usually how it works is the, is
Speaker:the agency, the government agency, goes through all the comments, considers, you know, the
Speaker:impact and then issues some time later, and there's no set time, but generally a month,
Speaker:two months later, they'll issue a final rule.
Speaker:And within that final rule, they'll probably adjust some of the you know,
Speaker:proposed rule, and they usually set an implementation date sometime in the future.
Speaker:And the beauty of the proposed rulemaking process or the rulemaking process is
Speaker:you get to comment on the proposed rule.
Speaker:You get to weigh in with impacts to your particular part of industry,
Speaker:or if you're a citizen or however you want to comment you comment.
Speaker:It's usually taken into consideration in the final rule.
Speaker:And then you are given some lead time to implement because none of these things you
Speaker:know, it's going to take some adjustment period.
Speaker:And that's generally how the rulemaking process has played out.
Speaker:And Kate, can our audience themselves go in and comment, like if they're a
Speaker:small business owner or whatever, they're allowed to comment on that process.
Speaker:They're allowed to comment.
Speaker:And if you go in and look at the, so you, and it's super easy to do cause you can just do it
Speaker:online through a link from the proposed rule.
Speaker:And I'd be happy to send that to you after we talk.
Speaker:And you can even see the public comments that are already been posted.
Speaker:And many of them are from small businesses, from individual citizens and, you know, and it's fine.
Speaker:Like.
Speaker:I'm going to tell my members, I've already told them, use ours as a template.
Speaker:If you want to use the exact same thing, stick your name on it.
Speaker:Or you want to just take a section and expand on it.
Speaker:I mean, this is how you make your voice heard.
Speaker:This is how you and if you've ever done any part of the, if anybody's followed any part
Speaker:of the rulemaking process, you make it 200 of the exact same sort of template, but it
Speaker:still matters because it shows that this is something that's important to your business,
Speaker:to your, you know, community or whatever it is.
Speaker:And I just want to, I was going to say, I want to add to that, Kate, I tend to be the person
Speaker:who thinks like, oh, my voice doesn't matter.
Speaker:I'm just one person.
Speaker:And that is so not true.
Speaker:I, I do think that in general, our leaders try to listen, especially when
Speaker:they see more and more people who are commenting and sharing their thoughts.
Speaker:I had an experience some years ago where I was just whining and complaining about a street
Speaker:light in my city that was not working right, and I complained and complained to my friend,
Speaker:and she just wrote the city, and they went, sent someone out to fix it the next day, and I was
Speaker:like, oh my word, I'm just whining, and, so.
Speaker:Ever since then, I've thought, do reach out.
Speaker:People actually are listening, and sometimes we forget.
Speaker:So I love that, Kate.
Speaker:I will get that link from you and share it here with the episode.
Speaker:That's great.
Speaker:I don't want to get hopes too high because this is an unusual sort of situation, but you're right.
Speaker:And the other thing about that is if you don't comment, they can always
Speaker:point and say, well, nobody commented.
Speaker:Why are we even having a comment period?
Speaker:And you hate for that to be, you know, eliminated in the future.
Speaker:Or that pointed to as a reason that something didn't change.
Speaker:I think the difficulty with this one is that you have the rulemaking process that's going on around
Speaker:something that's been in the works, you know, and there's been a lot of work done both from the
Speaker:industry side and Customs and Border Protection on this topic to try to get to this rulemaking.
Speaker:And then you have what the administration is doing around the tariffs.
Speaker:And I just hope we aren't sort of overrun by events.
Speaker:That this rulemaking will get the will get the deliberate thoughtful
Speaker:process that it really deserves.
Speaker:I see.
Speaker:So when we just have an executive order like that, though, then, like, what happened the first
Speaker:time it just kind of shut it down and we sort of saw we hadn't thought through everything.
Speaker:And there was a little bit of chaos around that.
Speaker:Is that what you're saying?
Speaker:There's a lot of chaos and it's hard to make those changes so quickly.
Speaker:And it's not good for businesses who especially for supply chains that are sort of
Speaker:dependent on having some process in place.
Speaker:And making a change and then undoing it and then changing it a month, you know, or a week later
Speaker:is just difficult and it's, it's difficult on the, on the end consumer, it's difficult and
Speaker:it's on the business and on the supply chains.
Speaker:And you know, I just think it's one of those things that we probably, when you can have a more
Speaker:deliberate process to it, it will also ensure that more and more people are ready to do it, you know.
Speaker:And it and it was difficult on on CBP.
Speaker:I mean, to have a million packages and coming in or stacking up.
Speaker:There are places to stack these things up.
Speaker:You know, it's just like, we got to keep commerce moving.
Speaker:So.
Speaker:Yes, absolutely.
Speaker:So.
Speaker:I know the tariffs are paused until I think April 2nd.
Speaker:When those are unpaused, does that, is that also gonna unpause de minimis?
Speaker:Are they connected to that currently?
Speaker:Had been connected.
Speaker:Cause the original executive order included that de minimis exemption was going away.
Speaker:But those executive orders have since been updated with amendments to the executive orders.
Speaker:So de minimis exemption, I believe will stay in place until such time as there is
Speaker:the Commerce Secretary and CBP and the Postal Service and anyone else that can put in place
Speaker:a mechanism to collect the tariffs in a way that doesn't hold up you know, commerce.
Speaker:Okay.
Speaker:So how are companies responding to?
Speaker:So let's say the de minimis exemption does go away or is altered or changed, the amount shifted?
Speaker:What do businesses need to do?
Speaker:Let's start with people like SHEIN and Temu I know I had all kinds of friends and family rushing
Speaker:to buy a whole bunch of SHEIN and Temu goods before they felt like maybe it was gonna go away.
Speaker:What are we seeing in the industry?
Speaker:How are people responding?
Speaker:I think Temu and SHEIN, they saw this coming, right?
Speaker:And they've already made adjustments where they're putting warehouses in the United States
Speaker:and getting those probably in the places that get closer to the final mile delivery points.
Speaker:You know, strategically placing warehouses in the U.S. so that things don't have
Speaker:to come through the de minimis entry.
Speaker:They come as as cargo shipments or whatever it is.
Speaker:So I think they, I think again this is what's made them so successful, too, right.
Speaker:They're, they can adapt and they are adapting their supply chains.
Speaker:I think others will look to do that.
Speaker:But if you're a smaller business, you maybe don't have that luxury.
Speaker:I think what you probably want to do is rely on technology partners, rely on service providers
Speaker:to kind of help you know, And, and there's a lot of trade and compliance tools out there.
Speaker:A lot of my members, I mean, you know, EasyPost and et cetera, you're all in the space of
Speaker:providing the tools that helps to make make it as easy as possible for, and as seamless as possible
Speaker:for companies to do cross border shipping.
Speaker:And I think that is going to be such an important part.
Speaker:It already is.
Speaker:You know, you're trying to make the cross border experience as close to a domestic
Speaker:experience as possible, because if you don't, then people stop buying from
Speaker:overseas, and international ecommerce maybe isn't as attractive.
Speaker:So I think cross border ecommerce has done really well in terms of in terms of speed and
Speaker:delivery options and all of those things where it is so similar to the domestic experience.
Speaker:But if, if we can't kind of figure out how to smooth out this de minimis situation,
Speaker:you know, I think that, I think that hurts the international ecommerce community a bit.
Speaker:Yeah.
Speaker:I loved where you said that the cross border experience should be as close
Speaker:to a domestic experience as possible.
Speaker:That, that was mic drop.
Speaker:That is something I hadn't really thought.
Speaker:Loved that, Kate.
Speaker:So, so true.
Speaker:What we want is that smooth, easy experience.
Speaker:I just, I keep thinking of my hairdresser and, and her purchasing a cross border as a small business.
Speaker:So she can rely, you know, should she be looking to trade organizations
Speaker:like you, to her, you said technology people, people like EasyPost, somewhere.
Speaker:You know, I guess any other practical solutions for somebody who's been sourcing
Speaker:goods outside of the U.S., small business?
Speaker:Would you recommend looking inside the U.S. Or, or do you feel like there's a time frame I can
Speaker:tell, she was asking me all these things, you know, time frame of other legislation that's
Speaker:going on outside of the executive orders?
Speaker:Yeah.
Speaker:Well, I hope you're getting a free haircut out of all this advice you're giving.
Speaker:I know, right?
Speaker:Right.
Speaker:She holds a lot of power, Kate.
Speaker:You don't want to take her off.
Speaker:I get it.
Speaker:I think what I've heard, I've heard a lot of people say is that you need to and it's
Speaker:tougher for a small business, but I do think you can't have all your eggs in one basket, right?
Speaker:Like, maybe you look to source domestically as well as continue to find solutions
Speaker:that help to continue to use, because, you know, in some cases there aren't
Speaker:necessarily domestics options just yet.
Speaker:I mean, it might be down the road, but so I think a lot of people said you have to have,
Speaker:look to vary your suppliers, look to have you use more than one service provider perhaps.
Speaker:But I think when you're a small business, it's hard because all of those things come at a cost.
Speaker:And one of the other things that I read which is if you're a big, if you're a big retailer like
Speaker:Walmart, you have the leverage to kind of lean on your suppliers to demand that they, you know, that
Speaker:they eat some of that cost of the of the tariff.
Speaker:But if you're, but that just means that supplier is going to seek that cost
Speaker:that, you know, squeeze somewhere else.
Speaker:And that's usually the small and mid sized business.
Speaker:So it's just going to be a tough and I think things, hopefully we will.
Speaker:I hate, you hate to say you hate for the economy to the blips that are occurring
Speaker:in the economy to kind of be the wake up call, but I kind of hope it is.
Speaker:I hope some of these tariffs get either lifted or reduced or are done a little
Speaker:more strategically because you're right.
Speaker:It's sort of, it's sort of been like the napalm blast.
Speaker:And while some can sort of weather it, others are having a hard time figuring out how to adjust
Speaker:quickly because they're just not in that business.
Speaker:I mean, she's not, she's not in the supply chain business.
Speaker:She's in the business of, of selling, you know, a product that she needs
Speaker:something from another part of the world.
Speaker:So, I, I don't know.
Speaker:I don't think I have an answer for that one.
Speaker:I, again, like you said earlier, if you had the answers.
Speaker:You and I, we'd be up leading the world or something.
Speaker:We'd be a lot higher pay grade than we are if we had some of these answers.
Speaker:Okay, so, final question.
Speaker:We're running late on time.
Speaker:I think that you've given us a lot of the same sort of insights of we're kind of
Speaker:living in a world of uncertainty right now.
Speaker:Maybe, you know, do some risk management.
Speaker:Let's not, I love how you said, don't have all your eggs in one basket.
Speaker:Let's, I also loved how you said lean on others, lean on partners you've got, look for technology,
Speaker:look for people like trade organizations who can kind of keep an eye on what's going on for you.
Speaker:Try to stay updated and know what's going on.
Speaker:I had one last question.
Speaker:So are there legislative pieces that are going on right now that we should
Speaker:be aware of in terms of de minimis.
Speaker:This is a new Congress, right?
Speaker:So there were, there was legislation that was introduced in the previous
Speaker:Congress, which was the 118th Congress.
Speaker:And what happens with Congress is when, when a Congress ends, so the 118th ended in December, any
Speaker:legislation that was introduced, even if it made it all the way through a committee at the House,
Speaker:it has to be reintroduced in the new Congress.
Speaker:And I don't think we've had anything to date introduced around around de minimis and actually
Speaker:customs modernization, but I know it is of interest and we are likely to see something.
Speaker:And I wanted to just, it reminds me, you know, we talked about making your voice heard.
Speaker:That's another thing to do.
Speaker:Is this.
Speaker:And this is actually a really good thing.
Speaker:She needs to reach out to her member of Congress and just let them know, because frankly you
Speaker:know, Congress, a lot of these things are being done with executive orders, which some would
Speaker:argue and maybe even legally challenged that certain things need to be done legislatively.
Speaker:Like Congress is the one that makes the laws.
Speaker:So you really want to reach out to your member of Congress and let them know.
Speaker:And if you can get a meeting with them, I mean, these are the kinds of things that we've just
Speaker:had a webinar with, I've had a webinar with my members where we talked about how Congress
Speaker:works and the importance of reaching out.
Speaker:Because they need to hear from small businesses.
Speaker:And, and they, I forget what percentage, you know, most of businesses in
Speaker:America are small businesses.
Speaker:So it, I think that's really key.
Speaker:And even if you don't, you don't even have to go in there and say the word de minimis,
Speaker:you just have to say, you know, I am getting absolutely hammered by what's going on.
Speaker:And it just resonates.
Speaker:And those are the kinds of things that will help to shape legislation.
Speaker:I, I absolutely agree.
Speaker:So tons of fantastic advice from you here today, Kate.
Speaker:I know it's a, it's a volatile world right now and it's chaos and, and we're
Speaker:all figuring out what to do, but I, I think you had some really solid advice.
Speaker:Look at your plan.
Speaker:Don't have your eggs in one basket.
Speaker:Make your voice heard.
Speaker:Keep informed.
Speaker:All of those are really great.
Speaker:And you provided us some good insight on what's going on with de minimis.
Speaker:Helped me understand a little bit that it's kind of been separated from the tariffs.
Speaker:And so when that comes back in April, that that's not going to affect de minimis for now.
Speaker:So thank you so much for being here.
Speaker:This was fantastic.
Speaker:Everyone, please give us your insights.
Speaker:If you do have a story, please share with us.
Speaker:We'd love to hear from you.
Speaker:And hopefully you're hanging in through all of, all of this craziness that's going on.
Speaker:And Kate, again, thank you.
Speaker:And we will see you all next time.
