Trading

When De Minimis Ain't So Minimal

By the time you’ve finished reading this, you’ll owe the government a nickel for the privilege of breathing free air.

Marcus Tullius Cicero

By the time you’ve finished reading this, you’ll owe the government a nickel for the privilege of breathing free air. Or so it feels when you dive into the latest economic lunacy dissected by the Adam Smith Institute in their blog post, “When De Minimis Is No Longer Minimal.” Buckle up, because this one’s a doozy—a tale of bureaucrats, tax grabs, and the slow strangulation of global trade, all wrapped in a bow of red tape so thick it could choke a Clydesdale.

The de minimis rule, for those who’ve been blissfully ignoring the fine print of international commerce, is the threshold under which small shipments can skip import duties and taxes. In the U.S., it’s $800, a number that sounds generous until you realize it’s the only thing keeping your $12 AliExpress fidget spinner from costing as much as a used Kia. The idea was simple: let the little stuff slide, save the customs folks from drowning in paperwork, and keep the global marketplace humming. But now, the powers-that-be are eyeing this loophole like a vegan eyes a kale smoothie, and the Adam Smith Institute is sounding the alarm.

Why the sudden itch to meddle? E-commerce, baby. The internet’s turned every Tom, Dick, and Harry into an international importer. In 2022, the U.S. saw 2.7 billion de minimis shipments—yes, billion—and that number’s climbing faster than a politician’s promises in an election year. These shipments, mostly cheap goods from places like China, are flooding markets, undercutting local businesses, and giving customs agencies a collective migraine. The Institute points out that this tsunami of trinkets is distorting trade, dodging taxes, and making a mockery of fair competition. And when governments smell lost revenue, they don’t just sit there twiddling their thumbs—they sharpen their knives.

Enter the bureaucrats, stage left, with proposals to slash the de minimis threshold or scrap it altogether. The U.S., Canada, and the EU are all flirting with this idea, and it’s about as appealing as a root canal without anesthesia. Lower the threshold, and suddenly your $50 Shein haul gets slapped with duties, taxes, and enough processing fees to make you wish you’d just shopped at Walmart. The Institute crunches the numbers: in the U.S., de minimis saves consumers and businesses $67 billion annually. That’s not pocket change; that’s a lifeline for small businesses and bargain-hunters alike. Choke it off, and you’re not just hiking costs—you’re killing jobs, stifling innovation, and handing authoritarians like China a playbook for economic control.

But here’s the kicker, and it’s pure PJ O’Rourke: the same governments crying foul over lost revenue are the ones who’ve spent decades perfecting the art of wasting it. They’ll tax your $10 phone case to “protect local markets,” then blow the proceeds on a $10 million study to determine why nobody trusts them. The Adam Smith Institute nails it: this isn’t about fairness; it’s about control. Governments hate it when you slip through their fingers, buying direct from Shenzhen without kissing the customs agent’s ring.

So, what’s the fix? The Institute suggests a middle ground: streamline customs processes, target abuses like counterfeit goods, and maybe nudge the threshold down a smidge—but don’t torch the system. Because when de minimis stops being minimal, it’s not just your wallet that takes a hit. It’s the whole damn idea of a free market, drowning in a sea of bureaucratic bilge. And that, my friends, is a tariff too steep to pay.

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