In a pivotal move for the American ecommerce community, the Ecommerce Innovation Alliance (EIA) today announced the filing of an amicus curiae (“friend of the court”) brief in the United States Court of International Trade (CIT) case Axle of Dearborn, Inc. d/b/a Detroit Axle v. Department of Commerce. EIA was supported in this effort by James K. Kearney, a partner in the Government Contracts and Global practice groups at Womble Bond Dickinson.
The filing of this brief underscores EIA’s unwavering commitment to protecting U.S.-based small and mid-sized ecommerce businesses and consumers who rely on the crucial de minimis exception for imported goods. The brief urges the court to grant a preliminary injunction against the government’s abrupt elimination of the de minimis exemption for goods from China, arguing that this action is unlawful and causing immediate, irreparable harm.
This filing comes on the heels of a significant victory for the import and ecommerce community. Just this week on May 28, 2025, a unanimous 3-judge panel of the Court of International Trade (CIT) struck down several major tariff programs implemented by the Trump administration under the International Emergency Economic Powers Act (IEEPA). The court found that the President exceeded the authority granted by Congress in imposing widespread “Trafficking Tariffs” and “Worldwide and Retaliatory Tariffs”.
Why The Tariff Ruling Matters
The CIT’s ruling in V.O.S. Selections, Inc., et al. v. United States held that Congress, not the President, possesses the constitutional power to lay taxes and regulate foreign commerce. While Congress can delegate authority, it must be within clear limits. The court reasoned that IEEPA’s authorization for the President to “regulate… importation” does not grant unlimited power to impose tariffs. Furthermore, the court determined that the “Trafficking Tariffs” did not directly “deal with” the declared national emergencies related to issues like drug trafficking, finding the administration’s argument that tariffs created “pressure” or “leverage” insufficient. This ruling directly challenges the use of IEEPA as a broad basis for implementing trade measures like tariffs.
The connection between this tariff ruling and the Axle of Dearborn case regarding de minimis is significant. As EIA argues in its amicus brief, the government’s elimination of the de minimis exception for goods from China was based on a series of Executive Orders that relied on presumed powers under IEEPA. EIA’s brief contends that, just as the CIT found in V.O.S. Selections, IEEPA cannot serve as a lawful basis for such broad trade actions, particularly when Congress has provided specific instructions for modifying policies like the de minimis exemption.
EIA’s Longstanding Fight for De Minimis
The de minimis exception, currently codified at 19 U.S.C. § 1321(a), allows goods valued at $800 or less to be imported duty-free. Originally conceived as a measure for administrative efficiency to avoid collecting negligible revenue, it has evolved into a tool for trade facilitation and economic benefit, especially since Congress raised the threshold to $800 in 2015. This increase was intended to provide significant economic benefits through cost savings and reduced trade transaction costs. Many EIA members, typically small and mid-sized U.S.-based ecommerce businesses, have built their operations and supply chains relying on this policy, utilizing the tools made available by Congress to keep prices down for consumers when importing high-quality goods.
EIA has been actively fighting against proposals to eliminate or curtail this vital exemption. In March 2025, EIA filed comprehensive public comments in response to a Notice of Proposed Rulemaking (NPRM) jointly published by the Department of Homeland Security, U.S. Customs and Border Protection, and Department of the Treasury. The NPRM proposed to make merchandise subject to certain ad valorem tariffs, including those from China, ineligible for the de minimis exception. In its comments, EIA vigorously advocated against this proposal, highlighting the profoundly negative consequences for both ecommerce businesses and American consumers. EIA also offered substantive, more targeted proposals to address government concerns without harming law-abiding U.S. businesses.
Notably, EIA’s comments to the NPRM included a proposal to leverage U.S. Foreign Trade Zones (FTZs). EIA suggested revisiting a prior agency interpretation to allow merchandise admitted into FTZs to qualify for the de minimis exemption upon withdrawal for individual sales valued at $800 or less. This approach would incentivize U.S. businesses to warehouse goods domestically, subject to U.S. laws and customs enforcement, providing greater oversight and security while preserving the de minimis benefit for American companies operating within regulated zones. Such an approach would make elimination of the de minimis exception unnecessary.
The Amicus Brief: Challenging Unlawful Elimination and Detailing Harm
EIA’s amicus brief in the Axle of Dearborn case reinforces these arguments and specifically challenges the government’s decision to eliminate the de minimis exception for China-origin goods as of May 2, 2025. The brief argues that this action is unlawful for two primary reasons:
- Failure to Follow Congressional Requirements: Congress explicitly stated in 19 U.S.C. § 1321(b) that any exceptions to the de minimis exemption must be created “by regulations” issued by the Secretary of the Treasury after a specific finding that such action is “necessary” to protect revenue or prevent unlawful importations. The government’s elimination of de minimis for China goods was done via Executive Order and a public notice, not through the required notice-and-comment rulemaking process mandated by both 19 U.S.C. § 1321(b) and the Administrative Procedures Act (APA). This circumvents the legal processes established by Congress.
- Improper Reliance on IEEPA: As highlighted by the recent CIT tariff ruling, IEEPA is not a broad grant of authority for implementing trade measures. EIA’s brief argues that relying on IEEPA-based Executive Orders to eliminate the de minimis exception bypasses the specific, limiting framework Congress put in place under 19 U.S.C. § 1321(b).
The brief details the immediate and irreparable harm being inflicted on EIA’s members. Eliminating de minimis subjects imports valued under $800 to standard tariff rates, Merchandise Processing Fees (MPF), and customs broker fees. For businesses operating on tight margins, these added costs are “crushing” and threaten their very existence. This forces businesses to either absorb expenses, reducing profitability, or pass costs to consumers, risking viability.
Furthermore, the elimination creates crippling administrative burdens. Small and mid-sized businesses lack the dedicated staff and resources to navigate complex import procedures, requiring customs brokers and extensive paperwork for low-value shipments. This diverts time and capital away from core business activities and hinders growth. The change also stifles innovation by making the import of components, materials, and samples more costly and time-consuming. Businesses are also forced into costly and complex supply chain disruptions, which is particularly difficult in the current “chaotic and constantly shifting trade environment”.
EIA emphasizes that small and mid-sized businesses are disproportionately impacted. CBP’s own analysis supports this, predicting significant price increases, net job losses of between 97,000 and 136,000 jobs in the first year, aggregate consumer welfare losses of $9.5 to $16.5 billion annually, and a decrease in GDP. The brief highlights that lower-income consumers, who are more likely to import de minimis shipments, will face a greater tariff impact, exacerbating financial pressures.
The harm to businesses is irreparable, extending beyond recoverable duties to include diminished business value, loss of goodwill, damage to reputation, and lost business opportunities.
Public Interest and Balance of Equities
EIA’s brief strongly argues that the public interest and balance of equities favor granting an injunction. The public benefits from preserving access to affordable imported goods, especially for lower-income households disproportionately affected by price increases. The public also has a substantial interest in safeguarding U.S.-based small businesses and the jobs they create. Finally, the public interest is served by ensuring government agencies comply with the law and established procedures, preventing unlawful agency actions that exceed statutory authority.
Looking Ahead
The Axle of Dearborn case represents a critical legal challenge to the government’s actions concerning the de minimis exception. EIA’s amicus brief provides the court with the perspective of small and mid-sized ecommerce businesses, detailing the severe practical and economic consequences of eliminating this vital exemption. The recent CIT ruling on tariffs provides a strong legal context, reinforcing EIA’s argument that the executive branch’s reliance on IEEPA for broad trade measures like the elimination of de minimis is unlawful and bypasses congressional authority.
While the legal battle continues, including the expected appeal of the CIT tariff decision, EIA remains dedicated to advocating for a stable and predictable trade environment essential for ecommerce growth. We will continue to monitor this critical case and provide updates as it progresses.
