How a Minor Change in US Trade Law Turbocharged the Fentanyl Crisis
In January 2023, U.S. federal agents raided the home of a Tucson maintenance worker who had a side hustle hauling packages across the border to Mexico.
They estimate that over the previous two years, the gray-bearded courier had ferried about 7,000 kilos of fentanyl-making chemicals to an operative of the Sinaloa Cartel. That’s 15,432 pounds, sufficient to produce 5.3 billion pills – enough to kill every living soul in the United States several times over. The chemicals had traveled by air from China to Los Angeles, were flown or ground-shipped to Tucson, then driven the last miles to Mexico by the freelance delivery driver.
Even more astonishing is what fed this circuitous route: a few paragraphs buried in a 2016 U.S. trade law supported by major parcel carriers and e-commerce platforms that made it easier for imported goods, including those fentanyl ingredients, to enter the United States.
This change to trade policy has upended the logistics of international drug trafficking. In the past few years, the United States has become a major transshipment point for Chinese-made chemicals used by Mexico’s cartels to manufacture the fentanyl that’s devastating U.S. communities, anti-narcotics agents say. Traffickers have pulled it off by riding a surge in e-commerce that’s flooding the U.S. with packages, helped by that trade provision.
In short, a regulatory tweak fueling America’s online shopping habit is also enabling the country’s crippling addiction to synthetic opioids.
So is an immutable aspect of international trade: Transporting goods is largely an honor system that’s easy for bad actors to exploit. Senders are supposed to tell the truth about what’s inside the boxes they export. But shipping documents are easy to falsify, and contraband fairly simple to camouflage. Authorities can’t inspect every box without bringing global commerce to a halt.
“It just makes it a monumental task to find that needle in a haystack,” said Patrick McElwain, a senior official with Homeland Security Investigations (HSI), an agency tasked with disrupting illicit fentanyl supply chains.
U.S. lawmakers inadvertently turbocharged this problem as part of the 2016 legislation by loosening a regulation known as "de minimis." Individual parcels of clothing, gadgets and other merchandise valued at up to $800 – one of the highest such limits in the world – now enter the country duty-free and with minimal paperwork and inspections. Fully 90% of all shipments now enter the country this way, and most arrive by air, according to U.S. Customs and Border Protection. The liberalized trade rule has been a boon for retailers and e-commerce platforms such as China-founded Temu and Shein that ship merchandise directly to buyers’ doorsteps.
America’s ports of entry are now so jammed with these packages, most of them from China, that just a tiny fraction of the nearly 4 million de minimis parcels arriving on U.S. shores daily are inspected by U.S. Customs. Security officials say that has made it easy for Mexican traffickers to sneak in small boxes of fentanyl ingredients from China disguised as mundane household items. Even modest amounts of these chemicals, known as precursors, can produce vast numbers of pills.
Traffickers then route these precursors south to Mexico, often using informal parcel handlers such as the Tucson maintenance man. There, powerful crime syndicates such as the Sinaloa Cartel and the Jalisco New Generation Cartel use the chemicals to manufacture industrial quantities of fentanyl. The finished product is smuggled back north to the United States, where it’s powering the biggest drug crisis in U.S. history.
Overdoses from synthetic opioids killed nearly 75,000 people in the U.S. last year alone, government figures show. Recent data suggest the pace of deaths may be slackening, but overdose fatalities remain alarmingly high, with hundreds of people dying weekly.
Stopping inbound fentanyl chemicals from reaching narcos has become paramount for law enforcement. Close to 3.8 tons of precursors were seized by U.S. Customs in fiscal 2023, nearly quadruple the total in 2021, when the agency first began collecting this data.
But security officials say they’re overmatched. The U.S. received 1 billion de minimis packages in fiscal 2023 with a declared value of $54.5 billion. That’s twice the number of parcels from four years earlier, government figures show. Mounds of sneakers, tools and toasters crowding customs warehouses are the perfect cover for random boxes of fentanyl ingredients to hide.
“We’ve lost control of what’s coming in,” said Rep. Earl Blumenauer, an Oregon Democrat who has proposed legislation to overhaul the system. “When you have a billion packages coming in, there’s no way you can keep track of illicit, unsafe, illegal products.”
Last month, President Joe Biden moved to strip de minimis eligibility from a host of Chinese imports to end what the White House described as Chinese companies’ “abuse” of the tariff-free exemption, a characterization that Beijing disputes.
Senior administration officials declined to estimate how much de minimis package volume might fall as a result of the proposal. In its announcement, the White House said that about 40% of U.S. imports, including 70% of Chinese textiles and apparel, would become ineligible for the tariff exemption.
But the rule-making process can take months, potentially leaving it to Biden’s successor to follow through once he steps down in January. The White House acknowledged its executive action is limited, and has asked federal lawmakers to pass comprehensive changes, including more resources for border officials.
“To really address the full scope of the issues with de minimis and bring down the overall volume of de minimis shipments, Congress will have to take action,” a senior administration official told Reuters.
Still, the problem is bigger than this one trade law, U.S. Customs officials say. Small U.S.-bound parcels are packed together inside larger containers, known as “master cartons,” for easy transport. Imagine a set of Russian nesting dolls, but comprised of thousands of boxes tucked inside other boxes. Master cartons are an indispensable tool of global trade, one that allows carriers to whisk vast quantities of merchandise around the world in the era of e-commerce. But fentanyl precursor traffickers take advantage of this legitimate shipping practice to hide chemicals, regardless of whether the boxes enter through de minimis or another customs program.
Over the past year, Reuters learned first-hand how easy it is for fentanyl ingredients to gain entry. As part of its investigation into the global chemical trade behind America’s opioid crisis, reporters purchased multiple precursors from Chinese sellers for shipment to the United States that independent lab tests later confirmed could be used to produce fentanyl.
Those chemicals ranged in price from $130 to $260, falling well below the $800 de minimis limit, and were delivered much like any other package. Some of these substances are not regulated under U.S. law, posing an additional challenge to law enforcement to stop them.
To understand how cartels have exploited America’s hyper-efficient import system to turn the U.S. into a key transit hub for precursors, Reuters spoke to more than 80 current and former law enforcement officials, diplomats, trade specialists, lawmakers, chemical suppliers and drug traffickers in the U.S., Mexico and China. The three nations are at the heart of the illicit fentanyl trade as the world’s largest consumer, manufacturer and raw materials suppliers.
The journalists also visited a package inspection facility near Los Angeles International Airport (LAX), one of the largest and most technologically sophisticated air cargo hubs in the United States. LAX received 684,000 air shipments daily in fiscal 2023.
Among Reuters’ findings: Some Chinese chemical suppliers are so confident the precursors they sell will evade detection that they offer a free replacement if authorities nab a shipment.
With U.S.-China ties fraying under the strain of an intense geopolitical rivalry, the once-obscure issue of de minimis is gaining bipartisan attention on Capitol Hill. A handful of bills, including the Import Security and Fairness Act sponsored by Blumenauer, seek to go further than the White House proposal by excluding not just some, but all Chinese imports from streamlined, tariff-free entry. The aim is to protect U.S. industries from cheap imports and disrupt the flow of illicit goods, including fentanyl chemicals.
Pro-trade groups are lining up in opposition. The U.S. Chamber of Commerce says such measures would disrupt e-commerce, raise prices for shoppers, and overburden customs officials by forcing them to clear hundreds of millions more packages through traditional channels. The group favors more government funding for additional border-protection personnel and better sleuthing.
“The answer isn't shutting off trade,” said John Drake, the chamber’s vice president for transportation, infrastructure and supply chain policy. “The answer is updating U.S. Customs’ tools comprehensively to reflect this reality.”
But the U.S. cannot escape the fact that de minimis rules that feed consumers’ desire for inexpensive goods have created a backdoor for fentanyl chemicals to enter the country virtually unchecked. That’s aiding the very traffickers Washington seeks to stop, said Eddy Wang, special agent in charge of the Los Angeles division of HSI.
“It's unfortunate and ironic how they're using the U.S. trade system to come back full circle and then kill Americans,” Wang said.
eBay sells a rule change
U.S. de minimis rules began in 1938. The term comes from a Latin phrase meaning too small to bother about. Congress scrapped duties on low-value goods entering the country because the cost of collection exceeded the revenue gained. The ceiling for duty-free entry was set at $1.
That climbed to $5 in the 1970s, then $200 in 1994.
By the late 2000s, the nation’s three biggest package delivery firms wanted more. In 2008, UPS, DHL and FedEx created their own trade group called the Express Association of America to press their issues in Washington. Top of the list was raising the de minimis ceiling to $800, according to Mike Mullen, the association’s executive director.
Mullen said the aim was to cut delivery times and reduce the carriers’ costs, which included employing customs brokers to process government paperwork on low-value packages subject to duties.
Other industry groups backed the idea. But getting lawmakers to support a measure seen as delivering a windfall to big business was no sure thing.
Enter eBay. Tiny American shop owners were using the e-commerce platform to source products and reach customers around the world. With an omnibus trade bill taking shape in 2015, eBay was determined to make these small sellers the face of the movement to expand de minimis. A Washington state hardware store owner and a Wisconsin scrapbook-supplies retailer were among the online sellers who arrived on Capitol Hill to meet lawmakers in April 2015 as part of a visit organized by eBay.
“It addressed a lot of political concerns,” said Brian Bieron, an eBay policy executive at the time. “It’s a way to say: ‘Everything you're hearing that says that trade is only good for the rich giant companies, the big elites, is not really true. It's actually helping really small businesses right here.’”
Online marketplace Etsy, a magnet for handicrafts sellers, likewise lobbied in favor of loosening de minimis limits. “Etsy supports trade provisions like the de minimis exemption, which is tailored to support microbusinesses,” the company said in a statement.
Attorney Greta Milligan Peisch, international trade counsel for the powerful Senate Finance Committee from 2015 to 2021, recalled the weight of those small-business voices in swaying votes. “It was one of the main drivers behind the support for the provision at the time,” Milligan Peisch said.
The 160-page Trade Facilitation and Trade Enforcement Act was passed overwhelmingly by a Republican-controlled Congress in February 2016 and quickly signed into law by Democratic President Barack Obama. Tucked inside was a short clause quadrupling the de minimis limit to $800.
Blumenauer, the Oregon congressman, was among those who voted in favor, a decision he now regrets.
“There was no hint of what we were getting into,” he said. “It was marketed as an efficiency item, it was just a minor tweaking of the threshold – except it wasn't.”
The impact was immediate. In fiscal 2016, de minimis packages entering the United States soared 90% over the previous year to nearly 255 million parcels, according to U.S. Customs. Then, as now, most of those shipments carried a declared value of well under $800; the average was $54 in fiscal 2023, the agency said.
The true power of the change was that de minimis was now squarely on the radar of businesses looking to tap it, said Steve Story, an executive with California-based Apex Logistics International. Companies recognized the potential of direct-to-consumer shipping to eliminate the expense of maintaining warehouses and physical stores. And he said the legislation broadcast worldwide a way to speed foreign-made goods duty free to the planet’s biggest consumer market.
“When they changed it to $800, boy, it exploded,” said Story, who owned his own customs advisory service at the time.
In another unforeseen twist, even more goods flooded in through de minimis after then-President Donald Trump’s decision in 2018 to impose steep tariffs on a host of Chinese merchandise, including cheap everyday items like baseball caps and shoes. Before the Trump tariffs, known as Section 301, suppliers mostly sent this low-cost merchandise in bulk through formal customs channels. Afterwards, to avoid the stepped-up duties, Chinese exporters and U.S. importers started shipping it directly to consumers via de minimis to dodge them altogether, according to former U.S. Customs officials and trade experts.
In early 2020, the pandemic hit, and a surge in online shopping pushed the number of de minimis packages even higher.
Trump is now running to retake the White House. Reuters asked his campaign to comment about the unintended consequences of his tariffs in driving more duty-free imports, including fentanyl chemicals, into the country. If elected, Trump “will use his executive power to stop the drug epidemic and protect Americans from dangerous drugs,” said Brian Hughes, a senior campaign adviser. He did not elaborate.
The campaign of Kamala Harris, Trump’s Democratic rival, didn’t respond to questions about her views on de minimis imports. On a visit to the U.S.-Mexico border in Arizona on Friday, Harris vowed to target the "entire global fentanyl supply chain."
Some 640 million shipments – about 60% of all de minimis packages entering the U.S. – came from China in fiscal 2023, customs data show. Temu and Shein alone account for nearly half of those, according to a U.S. congressional select committee on competition with China.
In separate statements, Shein and Temu credited their success to the efficiency of their business models, not de minimis. Shein Executive Chairman Donald Tang last year said publicly that he supports changes to the system if “the rules are applied evenly and equally, regardless of where a company is based or ships from."
Initially, the U.S. government forecast that public coffers would forgo $176 million in duties and fees over the first decade of the law’s existence due to the raising of the de minimis limit. Instead, that loss has ballooned to $735 million annually, based on current package volume, according to an estimate by Christine McDaniel, a trade expert at George Mason University in Virginia.
McDaniel nevertheless supports the de minimis measure, saying it’s a boon to shoppers and small businesses who’ve gained access to a wider variety of goods at lower prices. She estimates scrapping it would saddle U.S consumers and businesses with about $47 billion a year in extra import and shipping costs. Other estimates have put the figure lower. A study published by the National Bureau of Economic Research suggests consumers would pay $12 billion to $14 billion in higher prices and fees, an increase that would hit the poorest Americans hardest.
The research backs the idea that de minimis has made globalization work for the little guy.
Drug traffickers, too, spotted opportunity.
'I don't ask questions'
Mexico emerged as an illicit fentanyl manufacturing hub in the mid-2010s, U.S. anti-narcotics officials say. In those days, China, the world’s largest chemical producer, dominated production of finished fentanyl as well as precursor sales to Mexican cartels.
But in 2019, amid U.S. pressure, China placed fentanyl and its analogs under national control, effectively ending illicit exports of the finished product. Mexico’s crime gangs stepped in to take over production.
Those syndicates now needed more chemicals from China than ever before – and more avenues to get them into Mexico. Cartels had been arranging bulk deliveries by sea and air, U.S. officials said, but barrels of this material are harder to hide from law enforcement than small boxes are.
That’s when de minimis smuggling in small packages through U.S. airports really took off, U.S. Customs officers and anti-narcotics agents told Reuters.
To be sure, fentanyl ingredients also enter Mexico via small air shipments. For its supply-chain investigation, Reuters purchased several precursors flown directly to Mexico City from China that independent chemists determined could be used to make the drug. But the speed, reliability and sheer volume of packages moving through the U.S. entry system make it particularly attractive to traffickers, U.S. law enforcement officials said.
The case of the part-time package hauler from Tucson who helped the Sinaloa Cartel is emblematic of this shift.
Details about the man, Wadih Daahir, are reported here for the first time. He likely ferried thousands of kilos of precursors from the U.S. to Mexico between 2021 and 2023, according to two current and one former U.S. federal agents familiar with the situation. A 2024 Mexican government document seen by Reuters confirmed key details of the U.S. investigation into Daahir’s activities.
Most of these Chinese chemicals had entered the U.S. at Los Angeles International Airport and cleared customs through the de minimis exemption, two of the agents said. The precursors were then shipped to Daahir’s address in Arizona.
Daahir was questioned, but not charged. Investigators concluded he didn’t know what was inside the boxes and wasn’t aware the contents were intended for the manufacture of fentanyl, as required for a criminal prosecution. He died of a heart attack on July 1, 2024.
Days earlier, the burly 63-year-old told Reuters in an interview at his home how he had become an unwitting link in the global fentanyl supply chain.
Over four decades, the maintenance man had built a side business transporting packages to his native Mexico, where he had been born to Lebanese immigrant parents. Mexican clients who needed goods they couldn’t get easily at home had mail-order purchases shipped to Daahir’s red brick bungalow.
When enough parcels had accumulated, he’d load up his truck and head for the U.S.-Mexico border, where he said Mexican agents always waved him through. Daahir would slap a forwarding address on the packages and typically leave them with a local courier in the Sonoran border town of Nogales for transport to their final destinations. He said he charged 25% of a parcel’s value, and most customers paid him via deposits to a bank account he maintained in Mexico.
Daahir said he often hauled pesticides, seeds and tractor parts. So he wasn’t suspicious when a man calling himself “Engineer Jonathan” got in touch in late 2020 or early 2021 saying he needed regular deliveries of agrochemicals to Sinaloa, and that he would pay 5,000 pesos (about $250) for each pair of boxes brought across the border. Engineer Jonathan’s shipments began arriving about twice a week at Daahir’s home starting around early 2021.
Daahir said he never met this customer or learned his last name. Engineer Jonathan instructed Daahir to list someone else on the shipping label to take delivery in Sinaloa, a name that U.S. agents said turned out to be fake. The agents declined to reveal that name to Reuters.
“People in Mexico order things online. They arrive here, I grab them and send them to Mexico,” Daahir said in Spanish, pointing to a stack of packages on his porch. “I don't ask questions.”
When dozens of federal agents raided Daahir’s home in January 2023, they expected to find a fentanyl lab. Instead, they found about 40 kilos of a powdered substance inside several boxes intended for the Sinaloa mystery client. Two federal agents familiar with the situation told Reuters the powder turned out to be 4-AP, a key chemical used in the synthesis of fentanyl.
In the three months leading up to the bust, HSI agents had traced some 900 kilos (1,984 pounds) of fentanyl precursors, mostly 4-AP, arriving from China to Daahir’s doorstep, the two federal agents said. Daahir said orders of similar weight for Engineer Jonathan had been coming like clockwork for at least two years, leading investigators to extrapolate that about 7,000 kilos (15,432 pounds) had arrived.
Independent chemists consulted by Reuters said that quantity of 4-AP would produce some 5.3 billion fentanyl pills.
Mexican and U.S. authorities tracked several of Daahir’s packages to a Sinaloa warehouse controlled by a fentanyl trafficker with family ties to Joaquin “El Chapo” Guzman, the former Sinaloa Cartel kingpin now serving a life sentence in the United States.
No arrests have been made in the case.
HSI declined to respond to questions about Daahir, the fentanyl chemicals found in his home, or the investigation of the alleged Sinaloa Cartel operative for whom those packages were purportedly destined.
The agency did say it’s combating the fentanyl epidemic and targeting all aspects of transnational criminal organizations. HSI “takes the threat posed to our nation from the smuggling of illicit narcotics such as fentanyl and its precursor chemicals very seriously,” Executive Associate Director Katrina W. Berger said in a statement.
Mexico’s customs agency and its federal attorney general’s office, which investigates organized crime, did not respond to requests for comment about the case.
Before his death, Daahir told Reuters he felt remorse about his inadvertent role in contributing to America’s fentanyl crisis.
“I see people in the street, drugged up and talking to themselves. It’s really bad,” Daahir said.
U.S. authorities say there are likely hundreds, possibly thousands, of casual delivery drivers in the American southwest hauling goods to Mexico – as one former senior official put it, an “army of ants” to be harnessed by drug traffickers.
What's in the box?
The fentanyl chemicals that crossed the Pacific Ocean to Daahir’s front stoop were a textbook example of what U.S. Customs officials call the master carton smuggling scheme. This ruse is when criminals take advantage of the global shipping industry’s reliance on master cartons – big boxes used to contain many small parcels. Delivery companies worldwide use such cartons all the time. But this legal shipping practice is also vulnerable to abuse, because it’s easy for small parcels of contraband concealed inside the larger boxes to sneak past customs authorities.
In the case of fentanyl ingredients, this smuggling scheme begins in China, where precursor sellers lie about the contents of their shipments when handing them off to delivery companies. These firms aren’t required to, nor would they have time to, open every box to make sure its contents match the sender’s description.
The delivery companies bundle the individual parcels into master cartons alongside other legitimate goods, stack these cartons high on pallets, and bind them tightly together with plastic wrap or netting for easy loading onto planes.
These towers of master cartons can stand eight feet high and contain thousands of individual parcels, making them time-consuming to disassemble and search after they arrive in the U.S., customs officers said.
If they qualify for de minimis, the master cartons skip formal entry procedures. By law, U.S. Customs is required to collect detailed information about shipments that enter through traditional channels. This data includes specific product codes necessary to determine duties and taxes owed on the merchandise.
De minimis master cartons, in contrast, simply need an accurate description of the goods. But even those looser requirements frequently get short shrift. Some shipments arrive with little more than vague descriptions of what’s inside the individual boxes, such as “gifts,” “stuff,” and “goods of all kinds,” according to former U.S. Customs officials. They often get through anyway.
From there, the master cartons typically move quickly to freight forwarders for unpacking. The boxes inside, some of which come with pre-affixed shipping labels from FedEx, UPS, the U.S. Postal Service, and other carriers, are turned over to these firms for “last mile” delivery.
The return addresses on these labels often list the site of the U.S. freight forwarder or other U.S. locations, not those of the foreign senders. That was the case for the majority of the precursor chemicals that Reuters purchased from Chinese sellers for delivery to New Jersey.
All this can make it impossible to figure out who is sending these precursors and where exactly in China they’re coming from, further hampering efforts to crack down on this supply chain, anti-narcotics and shipping experts say.
U.S. Customs declined to disclose what percentage of de minimis parcels are inspected, saying such information would assist smugglers. But the agency acknowledged that officers usually wave things through unless tipped off about a suspicious shipment. Random sweeps occasionally turn up fentanyl chemicals amid all those boxes, said Andrew Chavez, watch commander of U.S. Customs’ tactical division at LAX.
“The bad guys are not giving us good information, clearly. So it comes down to that manpower,” Chavez said.
U.S. officials have been pressing China to prosecute precursor sellers who openly cater to the illicit fentanyl trade, and to require the country’s vast chemical industry to strengthen its know-your-customer practices.
Liu Pengyu, a spokesperson for the Chinese embassy in Washington, said China has some of the toughest drug controls in the world and has “always strictly controlled the chemical precursors in accordance with international conventions and domestic laws.”
Chinese freight forwarders often pack the boxes into master cartons and send them across the Pacific. But Reuters’ purchases of precursors revealed that U.S. delivery companies with operations in China have likewise transported mislabeled packages containing fentanyl ingredients.
For example, one such chemical that Reuters bought from a Chinese seller for $150 arrived in the United States in March 2024 with an invoice declaring that the box contained $10 worth of “pigment ink.” The tracking record showed FedEx had received the package in Nanjing, China; flew it out of Shanghai to its logistics megahub in Memphis; then took it to its final destination, a rented mailbox in New Jersey.
Other Chinese precursor chemicals purchased by Reuters were delivered to that same mailbox by UPS and the U.S. Postal Service.
FedEx said that it goes “above and beyond” what is required by law in its cooperation with law enforcement. “Illegal substances have no place in our network,” the company said.
A UPS spokesperson said the company “prohibits shipments of illegal products in our network,” but that stemming the flow of such products “requires a coordinated public-private effort.”
The U.S. Postal Inspection Service, the law enforcement arm of the postal service, said that it works tirelessly with U.S. Customs and other partners “to combat illicit drugs entering the mail,” and that removing illegal drugs from the mail stream is a “top priority.”
In early May, U.S. Customs officials, including Los Angeles watch commander Chavez, assembled in a warehouse near LAX to screen master cartons for contraband. A visiting reporter was in tow. Some of the cartons were stacked on floor-to-ceiling shelving units. Others remained on pallets on the floor.
Cartons were placed on a conveyor belt leading to a large scanner, while a dog trained to sniff out agricultural products ran up and down a line of boxes.
Customs officers are piloting new approaches, including using dogs trained to detect fentanyl precursors, and harnessing artificial intelligence to scrutinize shipping addresses and other information to identify suspicious shipments.
But with hundreds of thousands of parcels arriving daily at LAX, the sheer volume has “put us on our heels,” Chavez said.
Meanwhile, the big delivery companies that pushed to loosen de minimis rules bear little liability for the proliferation of contraband they’re hauling. Daahir, the informal package hauler who spoke with Reuters, said FedEx and UPS brought most of the fentanyl chemicals delivered to him in Tucson.
Delivery companies must exercise “reasonable care” in establishing that what’s inside a box is what a sender says it is, said Lars-Erik Hjelm, a lawyer specializing in international trade law who used to work for U.S. Customs. Odd descriptions, weights, box sizes and declared values that don’t add up, all might trigger an investigation, he said.
But the reality, Hjelm said, is that if the size and weight of the box check out with the declared contents, “it would be difficult to hold the carrier responsible.”
Rethinking de minimis
On Capitol Hill, a growing chorus of U.S. lawmakers, both Democrats and Republicans, say they want to rein in de minimis. But bipartisan cooperation has been elusive in a tense and chaotic election year.
Legislators have presented at least six separate bills since 2023 that would significantly alter the framework. All but one would go further than the White House proposals. Some would ban all, not just a portion, of Chinese merchandise from the de minimis channel. Others would exclude entire classes of goods coming from anywhere in the world.
Like his fellow Oregon legislator Blumenauer, Senator Ron Wyden voted to liberalize de minimis in 2016, but is now pushing his own trade bill to revamp the system. Dubbed the FIGHTING for America Act, Wyden’s proposal, which has not been formally introduced in the Senate, would slash Chinese shipments eligible for de minimis. And it would ban entire categories of imports from anywhere in the world from entering tariff-free, including textiles, apparel and leather goods.
“I don't think anyone foresaw the explosion in retailers offering industrial-scale” direct-to-consumer shipping from China, “or the rise of the fentanyl crisis,” Wyden said in a statement to Reuters.
Chinese embassy spokesperson Liu said Beijing opposes proposed de minimis changes that would “discriminate against products from China.” He said U.S. tariff measures should adhere to international trade rules and provide “a fair, just, and non-discriminatory business environment for companies from all countries.”
A number of unions and the U.S. textile industry’s trade association back an overhaul. “De minimis has been a job destroyer,” said Kim Glas, president of the National Council of Textile Organizations.
Even some big retailers whose shelves are packed with Chinese merchandise want changes. That’s because the direct-to-consumer model employed by Chinese competitors threatens to undercut them.
The Retail Industry Leaders Association, a trade group of 200 large companies including Gap, Target and Kohl’s, has lobbied this year in support of a Republican bill that largely mirrors the White House proposal. That bill, End China’s De Minimis Abuse Act, would exclude large swaths of Chinese goods from the channel.
Amid all the talk about fair competition and jobs, families who have lost loved ones to fentanyl overdoses are calling for action, too. Andrea Thomas is executive director of Voices for Awareness, a Colorado nonprofit that promotes education about synthetic opioids. The group has begun stumping to tighten de minimis rules in the hopes of slowing the flow of precursors.
“If it stops one package from killing somebody, to me that's change,” said Thomas, whose organization backs both the Wyden and Blumenauer bills. Her 32-year-old daughter, Ashley Romero, died in 2018 after taking a fentanyl-laced pill that she thought was a painkiller.
But big businesses are pushing back. The rollback would snarl supply chains and raise consumer prices while doing little to fix the fentanyl crisis, said John Pickel, a former U.S. Customs official and now senior director of international supply chain policy at the National Foreign Trade Council, a pro-trade lobbying group.
Pickel said smuggling techniques like the master carton scheme can be effective on their own, regardless of de minimis rules. That’s because this consolidated shipping method is used in various customs entry programs, not just this streamlined system. Even if de minimis were scrapped, he argues, traffickers would continue to sneak boxes into the U.S.
“It’s tilting at the wrong windmill,” Pickel said. “This is not a de minimis problem. This is an illicit activity problem.”
Delivery companies also oppose an overhaul.
DHL said in a statement that it has invested in technology and screening to detect contraband such as fentanyl chemicals. But it said “the idea that eliminating de minimis would halt the flow of fentanyl is misguided, as it would not reduce this threat at other entry points.”
Mullen, the head of the Express Association of America, the lobbying group for FedEx, UPS and DHL, said the firms do support more robust reporting requirements for de minimis shipments. But they want to keep the channel open for as many goods as possible because streamlined entry saves them money.
When asked about drug traffickers exploiting de minimis to import fentanyl chemicals, Mullen said the rise of online shopping was a much bigger factor in driving the surge in packages than was the 2016 legislative change he helped promote.
Similarly, Bieron, the former eBay executive, said his company’s successful lobbying to loosen the trade rule wasn’t to blame for opening the precursor pipeline. “Illegal smuggling has been big business forever,” he said. “Well before e-commerce or a de minimis ever existed.”
eBay did not respond to questions about narcos leveraging the de minimis rules it championed. The company did say that it supports “common sense customs policy reforms that address the emergence of new, unscrupulous Chinese e-commerce players.”
The packages keep coming. The United States received nearly 1.4 billion de minimis shipments in fiscal 2024, up 40% from the previous year, U.S. Customs data show.
Overdose deaths from the fentanyl crisis, which began about a decade ago, also keep climbing. By the end of this year, the synthetic opioid epidemic is expected to have claimed nearly half a million American lives, according to the latest government forecast.
That death toll already exceeds the number of U.S. soldiers killed in the Second World War.
(Reuters - Reporting by Drazen Jorgic, Stephen Eisenhammer, Laura Gottesdiener and Kristina Cooke; Additional reporting by Maurice Tamman, Benjamin Lesser, Daisy Chung, Michael Martina, David Lawder and Graham Slattery; Editing by Marla Dickerson)