Oregon has nearly 400,000 small businesses. (MoMo Productions/
Getty Images)
Supporting small businesses should be a top policy priority for anyone in public office. Their success means good-paying jobs, economic growth and innovative solutions.
In Oregon, we boast nearly 400,000 small businesses, and members of our congressional delegation, specifically U.S. Sen. Ron Wyden has consistently pledged his support of these businesses and growing trade in Oregon. As Wyden said himself: “So much of what we do depends on trade and what we like to do is grow things here, make [things] here, add value to them here, and then ship them somewhere.”
Though Wyden has been a consistent champion for small businesses and consumers, a trade bill he introduced seems to run counter to their core interests — and, in fact, could make life much harder for the small business community and their customers. The proposed legislation would significantly restrict the de minimis customs entry type, a law designed to streamline the importation of shipments under $800 to minimize red tape and lower costs for merchants who import goods while maintaining lower consumer prices. De minimis may not be a household name, but it is crucial in creating a level playing field for small businesses competing against major retail brands while striving to grow in today’s modern economy.
The economic consequences of his proposed rule change could be devastating for Oregon. Experts at the Mercatus Center suggest the elimination of the de minimis threshold could add roughly $50 billion in additional costs for American consumers and businesses each year. It could easily reignite the inflation woes that the country is finally moving past, and these additional costs for consumers could disincentivize them from shopping at small businesses. In addition, this legislation would be difficult for U.S. Ccustoms and Border Protection to administer, and it could lead to supply chain slowdowns for American consumers and small businesses alike.
Worse yet, a study by Yale and University of California, Los Angeles researchers found that major restrictions to de minimis would will disproportionately hurt lower income families, as they typically purchase goods that benefit from this rule.
They found that, “The poorest ZIP codes would face a 12.1% tariff, whereas the richest ZIP codes would face a 6.7% tariff,” the study said.
These kinds of outcomes are antithetical to Wyden’s policy goals as they would undermine the economic progress and key constituencies he pledges to support to give middle class Americans the chance to get ahead. In the past, Wyden has praised the current de minimis level, claiming it “benefits thousands of American small businesses across all sectors.”
Not only that, Wyden was a leading author of the Trade Facilitation and Trade Enforcement Act of 2015 that raised the de minimis level from $200 to $800. Why has he — like many lawmakers on both sides of the aisle, to be fair — suddenly changed his position?
As the most senior elected official of one of the most trade-dependent states, Wyden knows that drastic changes to our trade policy could have a negative impact on the jobs, goods and economic activity that rely on our many ports. As chairman of the powerful Senate Finance Committee, given all the heightened attention involving de minimis, he could leverage his influential position to craft a policy that doesn’t negatively impact the livelihoods of small business owners.
Wyden and his Democratic colleagues have long been champions of promoting a strong environment for the businesses that keep our economy running. They should pursue a better approach to trade that improves the ability of U.S. Customs and Border Protection to catch bad actors and doesn’t inadvertently harm the livelihoods of ordinary, law-abiding Oregonians.