Senate Passes Tax Bill; Drawback Limitation Not Added, but De Minimis Ban Stays
The Senate passed the Trump tax bill with a tie-breaking vote from the vice president on July 1. The House of Representatives will vote on whether it will accept the Senate's changes to its bill.
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Both versions include a provision to end all e-commerce de minimis, starting July 1, 2027. Currently, only Chinese goods are barred from de minimis entry. However, the Senate dropped a provision in the House bill that would limit substitute drawback for tobacco. Two Republican senators had proposed a vote to add that back in, but their amendments were not brought up.
The National Council of Textile Organizations, which has led the push to end de minimis, issued a statement thanking Sens. Lindsey Graham, R-S.C., and Sheldon Whitehouse, D-R.I., for including the language. The two men lead the Senate Budget Committee. "De Minimis acts as a gateway for facilitating four million packages a day valued at $800 or less that often contain unsafe, toxic and unethical products made with forced labor, as well as lethal fentanyl and other illicit narcotics to the U.S. market duty free and virtually unchecked," NCTO wrote. "We applaud the Senate and House for validating that this loophole has caused widespread harm across businesses and communities and ending it once and for all."
The bill also contains limits on tax credits claimed by manufacturers, storage battery and solar farms, and wind turbine installations. For those projects, if they begin construction in 2026, the owners cannot buy components in that year above certain thresholds that come from Chinese firms.
The Coalition for a Prosperous America decried the final bill text, because a previous version started the restriction in June 2025. "These changes represent a dangerous and unacceptable giveaway to China’s subsidized solar industry, directly undermining American manufacturers, jobs, and national security," the group wrote. "This loophole would allow developers to stockpile Chinese solar equipment and still fully access U.S. tax credits at maximum value, as long as projects commence by 2026 and are placed in service before 2030."
The Solar Energy Industry Association, which CPA describes as a front for Chinese solar panel manufacturers that use inputs made from forced labor, described the last-minute changes as "limited improvements."
"This legislation undermines the very foundation of America’s manufacturing comeback and global energy leadership," SEIA CEO Abigail Ross Hopper wrote.
The American Clean Power Association also criticized the changes to green tax credits, which phase them out years ahead of schedule. "The Senate reconciliation package is a step backward for American energy policy. The intentional effort to undermine the fastest-growing sources of electric power will lead to increased energy bills, decreased grid reliability, and the loss of hundreds of thousands of jobs. Most discouraging is forfeiting the progress we’ve made in manufacturing batteries, wind turbines and solar panels, and the economic growth occurring in communities across the country," CEO Jason Grumet wrote.