Legislation was introduced in the Senate this week to eliminate the first sale rule, which would reverse nearly 40 years of judicial precedent and industry practice and increase costs at a time when affordability concerns are at an all-time high.
The first sale rule allows import duty to be paid on the price a middleman trading company pays the manufacturer instead of the higher price the importer pays the trading company.
For nearly four decades first sale valuation has been used to help keep costs down for businesses, manufacturers, farmers, and consumers. Proper use of first sale in a manner consistent with U.S. Customs and Border Protection rules and regulations is also an effective mechanism for CBP to increase compliance and gain increased visibility into todays complex supply chains. Importers benefit from better knowing their supply chains, which also aids in compliance with forced labor and other trade laws.
However, the new bill would am the customs valuation statute to require imported goods to be valued based on the "price paid or payable by the buyer in the United States for the merchandise in the last sale that introduces the merchandise into the United States." Such a change would further increase duties paid on imported goods.
