What’s Going On With De Minimis? With Kate Muth From International Mailers Advisory Group - Ep. 57
In This Episode
Along with recent changes to U.S. tariffs, there’s been talk about changes to the de minimis exemption that allows tax-free imports of goods worth up to $800.
How does de minimis work, and what will it mean for businesses if the rule is changed? Kate Muth, executive director of the International Mailers Advisory Group (IMAG), weighs in.
De minimis defined
Kate explains, “De minimis is the value under which goods can come into the U.S. free of duties and without having to [go] through the formal entry process.”
The de minimis threshold for U.S. imports is higher than many other countries: $800.
While people often talk about the “de minimis loophole,” Kate clarifies that de minimis isn’t a loophole. “It's actually a core U.S. trade policy. … It's based on sound economic underpinnings that goods can be shipped quickly and affordably. You know, they can have a streamlined process for entry. And that benefits U.S. businesses.”
What’s going on with de minimis in the U.S.?
When the Trump administration announced tariffs against Mexico, China, and Canada, they also announced that the de minimis exemption was going away. But as Kate explains, the abrupt change caused a lot of issues.
“[It happened] way too suddenly. It overwhelmed CBP. … The Postal Service briefly said [they weren’t] going to take anything from China or Hong Kong, because [they don’t] have a mechanism to collect duties and taxes.”
The result?
“The president came out with an updated executive order and said, we will reinstate de minimis exemption until an effective mechanism for collecting the duties and taxes can be in place. … So we're still in that period [where] de minimis is allowed.”
De minimis, tariffs, and SMBs
While larger organizations will be able to adjust to de minimis changes and new tariffs, small businesses are likely to struggle.
As Kate notes, “If you're a big retailer like Walmart, you have the leverage to lean on your suppliers to demand that they eat some of that cost of the tariff. But that just means that the supplier is going to seek [to recover] that cost … somewhere else. And that's usually the small and mid-sized business.”
Links
Transcript
Lori Boyer 00:00
Welcome to Unboxing Logistics. I'm your host, Lori Boyer, and today we are going to be diving into a little bit of topic that we are all over in the news lately. We're going to be talking de minimis. I have brought on Kate Muth. She is the Executive Director of IMAG, and she's going to be talking to us about what's going on with de minimis, what are we seeing as of now, as we know, things are changing a lot with tariffs and de minimis and all of those good things. So this is going to be a great discussion for everyone. Kate, though, will you introduce yourself a little bit to our audience?
Kate Muth 00:36
Absolutely. I am Kate Muth. I am the executive director of the International Mailers Advisory Group or IMAG as most of us, most folks know us.
I got my start in this industry maybe 30 years ago. I was a trade reporter actually, covered the Postal Service, covered the business of mailing and shipping for, for about 10 years. And then kind of moved over to the association side of the of the house. And so I've written on on postal and logistics topics for many years and really have found my home here in the international space, which I really enjoy have great members and as we're going to discuss today, there's always something new going on.
Lori Boyer 01:18
There is always something new going on. In fact, this is a little sneak behind the scenes sort of peek here for our community. We actually had recorded this episode and we're re recording it because there have been changes since then. That's how quickly things do happen and things change. So giant shout out to Kate for doing coming back and sharing the latest updates with us.
Kate. So as part of our season, we've been doing a couple of fun little segments that I have loved. One of them is what we call AI reality check. I'm just asking experts to give us a little bit of a grade. I'm asking ChatGPT a question that's kind of in your domain, and I'm letting you kind of grade and see how well did ChatGPT do.
So far I have to say this season, kind of hitting a pretty good B, B+. So I, that's not bad, not bad. So, Kate, I have asked ChatGPT about what it thought were the biggest misses, the biggest failures in international mailing and shipping over the last five years. Okay? So it gave me three. Three top ones it feels like were the biggest, you know, oopsies.
So I, I'm interested to hear what you say on what it said. So the first one it said was USPS's slow rollout of its international ecommerce. It said that while other carriers kind of expanded their international ecommerce aggressively, USPS struggled a little bit with its international delivery times, tracking, customs.
Okay, so that was one. Two, it said Brexit. It said all of the shipping issues around Brexit caused a lot of chaos that was just really not thought through well. And three was China's de minimis loophole. Which, interestingly enough, is what we're gonna talk about. Kind of that surge in, in SHEIN and Temu and, and sort of the, the issues around that.
So it listed those as the three kind of big misses in the last five years. Agree. Disagree. Where do you feel, Kate?
Kate Muth 03:23
I mean, I think certainly Brexit and the sort of impact that had because that really did go across the entire European Union, right? You're leaving the European Union. So it's not just what's going on in the UK.
It's what the effect was for the European Union countries. And for those of us who were shipping to the UK when it was part of the EU, and now it's not. So right. I think that one's pretty good. It hit right on the target. I don't know about the Postal Service and international ecommerce. The Postal Service is just, I know the Postal Service is the largest, you know postal service in the world, post in the world, but they're very, they're not really that big in international.
They really are quite small in comparison to La Poste, Deutsche Post. You know, BPost even. So smaller countries actually have a bigger presence in international ecommerce. So that one, you know, that seems a little niche to me.
Lori Boyer 04:16
I totally agreed with that. I just had to say, Kate, I was like, really? Okay. So go on.
Kate Muth 04:22
So that one, I don't know about, but not to say Postal Service couldn't do more in international ecommerce, but it doesn't strike me as one of the biggest one of the biggest things for the last five years. I would say that, of course, the China and just the surge in ecommerce, not just into the U.S. but all around the world. And how customs authorities have had to adapt, make changes. You know, you've seen it not just here in the U.S. but other countries changing their value added tax, taking it down to zero or changing the duties and taxes that they put on goods coming from China. So I think, yeah, that one and just the rise of Temu and SHEIN I mean, they've grown so quickly. You see it in certain recent survey results that, you know, they were maybe just a blip a few years ago, and now they're, they're right up there with with Alibaba and Amazon. So, right. That's pretty remarkable.
Lori Boyer 05:12
Okay. So what would you give it as its grade overall, A to F?
Kate Muth 05:16
Yeah, I think they got two out of three, right?
And although that Brexit sort of a broad, sort of a broad target, I would give it maybe C plus, B minus.
Lori Boyer 05:27
I agree. I agree. I didn't, I wasn't that impressed with its answer on this. So that's, that's an interesting sort of insight there as we get into some of these more complex topics, sometimes maybe too broad, too generic.
It didn't go that well. So get, get your answers from people like Kate. Not like ChatGPT on things like this. Okay, exactly. Something else we've been doing this season is I've been asking people to share a person or multiple people or even a role of somebody you really admire in the industry. I've loved this topic.
So, Kate, who is somebody who's influenced you or that you just really admire in the industry?
Kate Muth 06:07
You know, there's so many, and you always risk when you say name and you don't say another, but I'm going to say one name, which is Shoshana Grove. She is the CEO of International Bridge. She comes from she, she was a, worked at the Postal Service, she worked for the Postal Regulatory Commission, and now she's been CEO of International Bridge for maybe, I don't know, eight, nine years.
So she's been on all sides of, of logistics, but you know, she is one of those people, as much as she knows, she's always a student of the of the industry. And she's kind of taught me that even when you think you know it all you know, there's still more to learn, but she's also a champion for women in, in logistics and, and in postal and in government.
She is the chair, co chair of the Women in Logistics and Delivery Services, which is an organization that supports women in in our industry. And I think I mentioned this when we recorded last time, she knows everyone, but she's so welcoming to newcomers and she knows the best places in D.C. to have a meal. And she knows all of the restaurant, restaurateurs, so she's just a wonderful she's a friend, she's a colleague, and I just admire the, the heck out of her, so.
Lori Boyer 07:18
I love it. In a way, it kind of connects the fact that she's an, an always learner. You know, she, she has her, this great base of knowledge, but she's always open to new ideas. It's similar in the way that you said, while she knows everybody, she also welcomes new people. It's interesting to see those two things.
Basically, it's the same characteristic. And both help in the relationships and in the knowledge. So, fantastic. I love that. Shout out to her. Okay, let's get into the meat of our conversation. De minimis. Okay, so Kate, I'm here for it. First of all, if we have some, you know, maybe we've got some small ecommerce shipper and they're not quite aware of de minimis.
What is de minimis? What does it mean when you're shipping things across borders?
Kate Muth 08:02
Right, so de minimis in that regard is essentially the value under which goods can come into the U.S. free of duties and without having to be, you know, through the formal entry process. And I'll just say something because we, you actually used a word earlier when we talked.
I want to note that de minimis. It's called the de minimis exemption, so you're exempt from duties. And it's not loophole. It's actually a core U.S. trade policy. So it is it's it's, I know that gets thrown around a lot. You see it in headlines, but it's actually it's it's U.S. trade policy, and it's actually based on on sort of sound economic underpinnings that goods can be shipped quickly and affordably. You know, they can have something of a streamlined process for entry and that benefits U.S. businesses.
It benefits the American consumer. And it includes those businesses that may be like a manufacturer that that gets their intermediary goods through from another country, comes into the U.S. and then and then it's manufactured here in the U.S. So.
Lori Boyer 09:03
Great point.
Kate Muth 09:04
I just wanted to straight, say that because even when all of this was happening, with the tariffs and briefly losing the de minimis exemption you saw a lot of those headlines in the, in the papers.
And so I just thought I would I would say that.
Lori Boyer 09:18
No, I love that. So loophole gives us this impression that we over, it was an oversight, right? And that we somehow didn't know. But the exemption is this is specifically made out as part of our trade policy and makes a lot of sense. And I would assume then, Kate, countries throughout the world have their own de minimis exemptions, correct?
Kate Muth 09:38
So countries around the world, and we are a little bit of an outlier, the U.S. is because ours is so high. It's 800 dollars. So just to get back to the definition a little bit, it's anything coming into the U.S. to a single person or a single address one person, one day or one address one day, so it's anything under 800.
And of course, in the ecommerce world you know, a lot of direct to consumer products, are way below 800. And so you've seen other countries have a de minimis, whether it's for duties, they may have two different ones. They may have one on their value added tax in the European Union, and then there's a separate slightly higher one for duties.
Countries around the world have lowered their de minimis for some of the reasons we, we hit on at the very beginning, which is that so much has come in from China. And you know, there's other reasons too, there's economic reasons, there's protectionist reasons there's security reasons, it's, it's for a variety of reasons where people have set, or people, countries have set their de minimis levels, but in the U.S., ours is quite high, and I think that's probably why folks, you know, look at it sort of differently from, from what the rest of the world is doing, or has moved towards.
Lori Boyer 10:45
Okay. So ours is 800. If we were comparing some of the other numbers, do you know offhand, you know, Canada or some of the EU or anything?
Kate Muth 10:54
Canada is 40 for taxes and 150 for duties.
It's slightly lower through the postal channel. I think it's 20 for taxes into the European Union. It's, the value added tax is, is essentially zero. It's at the first euro you pay value added tax, but their de minimis on duties is not until 150 euro. And I think Mexico, I'm gonna get mixed up, I wanna say it's like 50.
50 dollars. You know, some of that Mexico and Canada, of course, also are what's in the USMCA, in the NAFTA 2. 0 agreement. So you know, again, countries can have bilateral agreements as well, or they can have, excuse me, trade agreements where that may be set. And then you have, like, places like Australia, New Zealand that have a goods and services tax, and they apply that the, the ship or the marketplace or the platform is the one who's responsible for collecting it and paying.
And, you know, there's a threshold of revenue, like, say, 75,000 Australian dollars before you even have to collect and pay it. So, countries have all said it somewhat differently. They have maybe different mechanisms for, for applying it, but you know, yes, it's different around the world.
Lori Boyer 12:12
Okay, so Kate, what kind of goods then are typically, if we're focused back on the United States, what type of goods typically do we see falling under this exemption?
Are they really specific, you know, industries or types, or does it cross all the industries?
Kate Muth 12:29
I think it crosses a lot of industries, but I think you can find clues from you know, for instance, some of the surveys or IPC, the International Post Corporation does an annual cross border ecommerce survey. And it kind of ranks the what the most purchased online goods are.
It's, you know, it's a survey of the consumers. And you see a lot of electronics, a lot of apparel you know beauty and makeup, goods like that. Certainly I see a lot of times as example, things like your your iPhone case or your phone case jewelry, you know, things like that. It's a lot of the stuff that we buy online. And maybe it changes a little bit year to year, but generally you see those handful of categories that are, are most common.
And of course, when you think about Temu and SHEIN, a lot, the fast fashion is a big part of it as well. A lot of that's coming in, but really it's a whole lot of things. Anything a consumer can buy online, but not just that. It's also, as I said, if you're a business and perhaps you need something for your own manufacturing needs or your own production needs you know, that can come through the de minimis exemption as well.
Lori Boyer 13:39
Okay. So then let's talk about it from that standpoint, what's going on with it. Interestingly, I had an experience. I went to get my hair done with my hairdresser, and she has a side business where she sells like balloons and that kind of stuff. And she mentioned that she had just been in a panic as a small business owner. But she gets all of her you know, mylar balloon things from Canada, and she was worried about some of these issues and some delays in the border as well as, you know, what was going to happen and was asking all these things, I don't know what's going on and what, how, what am I supposed to do?
And is this going to ruin my business if this goes away? And she was asking me knowing I work in the logistics field. So I think that's kind of our audience for some of those people out there. What is going on? They're not sure what it is. Can you give us kind of a, an overview, what is sort of the climate of, of what's going on with de minimis when it comes to legislation, when it comes to President Trump, you know, what, what is the state right now?
Kate Muth 14:41
Well, that is you know, if I can answer that succinctly or on the nose, I can probably play the, you know, play the numbers or something, but well, there's so much going on. You're right. And it is tied in with the tariff situation because if you remember in early February, when the Trump administration put the tariffs, initially they're going to be on Mexico and Canada.
Then we got a pause, but he did implement the additional 10 percent on on China. And initially, when those took effect, part of that executive order was you can no longer use de minimis. The de minimis exemption was going away. So everything that was coming in would pay duties and taxes and, and the and the new tariff.
And so what happened of course was, I mean, that was turned out two or three days later that got turned on. And so that's just like way too suddenly. It overwhelmed CBP. We discovered that the postal channel briefly, the Postal Service briefly said we aren't going to take anything from China or Hong Kong because Postal Service doesn't really have a mechanism to collect duties and taxes.
And there is also through the postal channel country of origin, that data element is not a requirement. It's just optional. So you can't even a hundred percent tell, you know, where it came from. So there was a lot, there were a lot of glitches right off the bat. And I think because it impacted and of course, then it was impacting small businesses.
It was impacting big businesses. CBP was overwhelmed. We, one article said they got something like a million packages stacked up at JFK. So the president came out with an updated executive order and said, we will reinstate de minimis exemption until you know an effective mechanism for collecting the duties and taxes can be in place.
And then the Commerce Secretary has deemed that that's acceptable. So we're still in that period of de minimis is still allowed. We've got the tariffs with Canada now on, on some things and some things with Mexico that aren't covered by the USMCA. And then there's, you know, retaliation. And we're going to have some expecting tariffs with the European Union in April 1st. So the de minimis piece of it, I believe at least with the European Union as well, will continue to have the de minimis exemption on things coming from the EU. Just because there are some of these sort of say technical aspects or practical aspects of it that have to be sorted out.
I think that is still a work in progress. And there are two, so, one other thing to note is that there's two rulemakings that Customs and Border Protection has issued. They issued them in the, it was actually in the waning days of the Biden administration. They pushed out these two rulemakings that had been in the works for a number of years.
And the first one is about you know, it's looking to secure ensure that illicit narcotics aren't coming through. To ensure that, you know, we're not allowing counterfeits, that people, it's really to protect the citizens. So one of the first one is to collect more data and kind of enhance the data elements that are being collected.
And then a second rulemaking proposes eliminating de minimis on any goods that come what they're called section 301, Section 201 or Section 232 goods. And so these are goods that the first Trump administration put tariffs on. And the Biden administration kept it on them. So those were the first, and they're really just, those were just addressed mostly to China.
Lori Boyer 18:21
Okay, so, so let me, I just want to make sure we're good. There were some concerns with de minimis that we were getting some narcotics, some security issues, some counterfeit items that were slipping under the radar. Correct? With the de minimis exemption. So they put on some additional rules to kind of help with that.
And that was a data collection and eliminating on, on some of those specifics, the 301, 201, 232. Am I getting this right, Kate?
Kate Muth 18:50
You're getting it right, except they're proposed rules. So they're not actually in place. They're proposed. So I, and I hope I, maybe I didn't state that clear enough, but it's a notice of proposed rulemaking, which is the first step in the rulemaking process.
And this is a little confusing, but the rulemaking process is actually the way that usually these things are done. It's not like we're gonna have a tariff tomorrow, and by the way, de minimis is gone. You know, that's, that's not usually how businesses adjust very well. So the rulemaking process is such that what has occurred is CBP, Customs and Border Protection, has put forward proposed rules.
It has given we have until next week on the one rule to submit comments. So it's, it's.
Lori Boyer 19:33
Okay. So what, do you have the date for that? March?
Kate Muth 19:36
March 17th, the comments are due. Just the comments are due for the data one. And for the one that's kind of, I refer to as the trade and national security one, which has really more to do with the de minimis exemption being removed on certain goods. That date is March 24th for the comments are due. And in the traditional rulemaking process, you submit, you know, it allows for interested parties, any stakeholder, for any citizen to submit comments. You can do it very easily online. There's already a bunch of comments that have been submitted. We'll submit ours in the next couple of days and and then usually how it works is the, is the agency, the government agency, goes through all the comments, considers, you know, the impact and then issues some time later, and there's no set time, but generally a month, two months later, they'll issue a final rule. And within that final rule, they'll probably adjust some of the you know, proposed rule, and they usually set an implementation date sometime in the future. And the beauty of the proposed rulemaking process or the rulemaking process is you get to comment on the proposed rule.
You get to weigh in with impacts to your particular part of industry, or if you're a citizen or however you want to comment you comment. It's usually taken into consideration in the final rule. And then you are given some lead time to implement because none of these things you know, it's going to take some adjustment period.
And that's generally how the rulemaking process has played out.
Lori Boyer 21:02
And Kate, can our audience themselves go in and comment, like if they're a small business owner or whatever, they're allowed to comment on that process.
Kate Muth 21:10
They're allowed to comment. And if you go in and look at the, so you, and it's super easy to do cause you can just do it online through a link from the proposed rule.
And I'd be happy to send that to you after we talk. And you can even see the public comments that are already been posted. And many of them are from small businesses, from individual citizens and, you know, and it's fine. Like. I'm going to tell my members, I've already told them, use ours as a template.
If you want to use the exact same thing, stick your name on it. Or you want to just take a section and expand on it. I mean, this is how you make your voice heard. This is how you and if you've ever done any part of the, if anybody's followed any part of the rulemaking process, you make it 200 of the exact same sort of template, but it still matters because it shows that this is something that's important to your business, to your, you know, community or whatever it is.
Lori Boyer 21:58
And I just want to, I was going to say, I want to add to that, Kate, I tend to be the person who thinks like, oh, my voice doesn't matter. I'm just one person. And that is so not true. I, I do think that in general, our leaders try to listen, especially when they see more and more people who are commenting and sharing their thoughts.
I had an experience some years ago where I was just whining and complaining about a street light in my city that was not working right, and I complained and complained to my friend, and she just wrote the city, and they went, sent someone out to fix it the next day, and I was like, oh my word, I'm just whining, and, so.
Ever since then, I've thought, do reach out. People actually are listening, and sometimes we forget. So I love that, Kate. I will get that link from you and share it here with the episode. That's great.
Kate Muth 22:42
I don't want to get hopes too high because this is an unusual sort of situation, but you're right. And the other thing about that is if you don't comment, they can always point and say, well, nobody commented.
Why are we even having a comment period? And you hate for that to be, you know, eliminated in the future. Or that pointed to as a reason that something didn't change. I think the difficulty with this one is that you have the rulemaking process that's going on around something that's been in the works, you know, and there's been a lot of work done both from the industry side and Customs and Border Protection on this topic to try to get to this rulemaking.
And then you have what the administration is doing around the tariffs. And I just hope we aren't sort of overrun by events. That this rulemaking will get the will get the deliberate thoughtful process that it really deserves.
Lori Boyer 23:30
I see. So when we just have an executive order like that, though, then, like, what happened the first time it just kind of shut it down and we sort of saw we hadn't thought through everything.
And there was a little bit of chaos around that. Is that what you're saying?
Kate Muth 23:43
There's a lot of chaos and it's hard to make those changes so quickly. And it's not good for businesses who especially for supply chains that are sort of dependent on having some process in place. And making a change and then undoing it and then changing it a month, you know, or a week later is just difficult and it's, it's difficult on the, on the end consumer, it's difficult and it's on the business and on the supply chains. And you know, I just think it's one of those things that we probably, when you can have a more deliberate process to it, it will also ensure that more and more people are ready to do it, you know. And it and it was difficult on on CBP.
I mean, to have a million packages and coming in or stacking up. There are places to stack these things up. You know, it's just like, we got to keep commerce moving. So.
Lori Boyer 24:34
Yes, absolutely. So. I know the tariffs are paused until I think April 2nd. When those are unpaused, does that, is that also gonna unpause de minimis?
Are they connected to that currently?
Kate Muth 24:46
Had been connected. Cause the original executive order included that de minimis exemption was going away. But those executive orders have since been updated with amendments to the executive orders. So de minimis exemption, I believe will stay in place until such time as there is the Commerce Secretary and CBP and the Postal Service and anyone else that can put in place a mechanism to collect the tariffs in a way that doesn't hold up you know, commerce.
Lori Boyer 25:18
Okay. So how are companies responding to? So let's say the de minimis exemption does go away or is altered or changed, the amount shifted?
What do businesses need to do? Let's start with people like SHEIN and Temu I know I had all kinds of friends and family rushing to buy a whole bunch of SHEIN and Temu goods before they felt like maybe it was gonna go away. What are we seeing in the industry? How are people responding?
Kate Muth 25:47
I think Temu and SHEIN, they saw this coming, right?
And they've already made adjustments where they're putting warehouses in the United States and getting those probably in the places that get closer to the final mile delivery points. You know, strategically placing warehouses in the U.S. so that things don't have to come through the de minimis entry.
They come as as cargo shipments or whatever it is. So I think they, I think again this is what's made them so successful, too, right. They're, they can adapt and they are adapting their supply chains. I think others will look to do that. But if you're a smaller business, you maybe don't have that luxury.
I think what you probably want to do is rely on technology partners, rely on service providers to kind of help you know, And, and there's a lot of trade and compliance tools out there. A lot of my members, I mean, you know, EasyPost and et cetera, you're all in the space of providing the tools that helps to make make it as easy as possible for, and as seamless as possible for companies to do cross border shipping.
And I think that is going to be such an important part. It already is. You know, you're trying to make the cross border experience as close to a domestic experience as possible, because if you don't, then people stop buying from overseas, and international ecommerce maybe isn't as attractive. So I think cross border ecommerce has done really well in terms of in terms of speed and delivery options and all of those things where it is so similar to the domestic experience.
But if, if we can't kind of figure out how to smooth out this de minimis situation, you know, I think that, I think that hurts the international ecommerce community a bit.
Lori Boyer 27:33
Yeah. I loved where you said that the cross border experience should be as close to a domestic experience as possible. That, that was mic drop.
That is something I hadn't really thought. Loved that, Kate. So, so true. What we want is that smooth, easy experience. I just, I keep thinking of my hairdresser and, and her purchasing a cross border as a small business. So she can rely, you know, should she be looking to trade organizations like you, to her, you said technology people, people like EasyPost, somewhere. You know, I guess any other practical solutions for somebody who's been sourcing goods outside of the U.S., small business? Would you recommend looking inside the U.S. Or, or do you feel like there's a time frame I can tell, she was asking me all these things, you know, time frame of other legislation that's going on outside of the executive orders?
Kate Muth 28:33
Yeah. Well, I hope you're getting a free haircut out of all this advice you're giving.
Lori Boyer 28:37
I know, right? Right. She holds a lot of power, Kate.
Kate Muth 28:44
You don't want to take her off. I get it. I think what I've heard, I've heard a lot of people say is that you need to and it's tougher for a small business, but I do think you can't have all your eggs in one basket, right? Like, maybe you look to source domestically as well as continue to find solutions that help to continue to use, because, you know, in some cases there aren't necessarily domestics options just yet.
I mean, it might be down the road, but so I think a lot of people said you have to have, look to vary your suppliers, look to have you use more than one service provider perhaps. But I think when you're a small business, it's hard because all of those things come at a cost. And one of the other things that I read which is if you're a big, if you're a big retailer like Walmart, you have the leverage to kind of lean on your suppliers to demand that they, you know, that they eat some of that cost of the of the tariff. But if you're, but that just means that supplier is going to seek that cost that, you know, squeeze somewhere else. And that's usually the small and mid sized business.
So it's just going to be a tough and I think things, hopefully we will. I hate, you hate to say you hate for the economy to the blips that are occurring in the economy to kind of be the wake up call, but I kind of hope it is. I hope some of these tariffs get either lifted or reduced or are done a little more strategically because you're right.
It's sort of, it's sort of been like the napalm blast. And while some can sort of weather it, others are having a hard time figuring out how to adjust quickly because they're just not in that business. I mean, she's not, she's not in the supply chain business. She's in the business of, of selling, you know, a product that she needs something from another part of the world.
So, I, I don't know. I don't think I have an answer for that one.
Lori Boyer 30:35
I, again, like you said earlier, if you had the answers. You and I, we'd be up leading the world or something. We'd be a lot higher pay grade than we are if we had some of these answers. Okay, so, final question. We're running late on time. I think that you've given us a lot of the same sort of insights of we're kind of living in a world of uncertainty right now.
Maybe, you know, do some risk management. Let's not, I love how you said, don't have all your eggs in one basket. Let's, I also loved how you said lean on others, lean on partners you've got, look for technology, look for people like trade organizations who can kind of keep an eye on what's going on for you.
Try to stay updated and know what's going on. I had one last question. So are there legislative pieces that are going on right now that we should be aware of in terms of de minimis.
Kate Muth 31:28
This is a new Congress, right? So there were, there was legislation that was introduced in the previous Congress, which was the 118th Congress.
And what happens with Congress is when, when a Congress ends, so the 118th ended in December, any legislation that was introduced, even if it made it all the way through a committee at the House, it has to be reintroduced in the new Congress. And I don't think we've had anything to date introduced around around de minimis and actually customs modernization, but I know it is of interest and we are likely to see something.
And I wanted to just, it reminds me, you know, we talked about making your voice heard. That's another thing to do. Is this. And this is actually a really good thing. She needs to reach out to her member of Congress and just let them know, because frankly you know, Congress, a lot of these things are being done with executive orders, which some would argue and maybe even legally challenged that certain things need to be done legislatively.
Like Congress is the one that makes the laws. So you really want to reach out to your member of Congress and let them know. And if you can get a meeting with them, I mean, these are the kinds of things that we've just had a webinar with, I've had a webinar with my members where we talked about how Congress works and the importance of reaching out. Because they need to hear from small businesses.
And, and they, I forget what percentage, you know, most of businesses in America are small businesses. So it, I think that's really key. And even if you don't, you don't even have to go in there and say the word de minimis, you just have to say, you know, I am getting absolutely hammered by what's going on.
And it just resonates. And those are the kinds of things that will help to shape legislation.
Lori Boyer 33:04
I, I absolutely agree. So tons of fantastic advice from you here today, Kate. I know it's a, it's a volatile world right now and it's chaos and, and we're all figuring out what to do, but I, I think you had some really solid advice.
Look at your plan. Don't have your eggs in one basket. Make your voice heard. Keep informed. All of those are really great. And you provided us some good insight on what's going on with de minimis. Helped me understand a little bit that it's kind of been separated from the tariffs. And so when that comes back in April, that that's not going to affect de minimis for now.
So thank you so much for being here. This was fantastic. Everyone, please give us your insights. If you do have a story, please share with us. We'd love to hear from you. And hopefully you're hanging in through all of, all of this craziness that's going on. And Kate, again, thank you. And we will see you all next time.