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Several weeks ago, I used this column to suggest an unconventional idea: The taxpayers of the United States would benefit greatly from the creation of a national tariff-payer advocate.
Such an officeholder would take on responsibilities that parallel those of the national taxpayer advocate — a position that has existed within the IRS since the mid-1990s — but in the tariff context.
The officeholder would be supported by a professional staff and function as an independent actor, at liberty to raise whatever concerns she deems appropriate insofar as they affect taxpayers. While the national taxpayer advocate is known as “your voice” inside the IRS, this new position would represent your voice within the External Revenue Service — an entity that does not exist yet, but one that President Trump has promised to establish.
The idea has drawn some criticism, including the observation that the U.S. public has been getting along just fine all these years without such an advocate. Fair enough, although tariffs have recently acquired a gravity that’s been absent for roughly the last 100 years. The public might not have needed this kind of advocate before, but it does now. The fiscal balance between internal and external taxes is experiencing a generational reset.
A separate criticism is that a tariff-payer advocate would have little to do, given that cross-border trade is thought to be a dry subject matter. Nuts to that, I say. Look no further than Tax Notes’ headlines since the start of the year. Four months into 2025 the business of tariffs is more dramatic than the comparatively sedate world of income taxation. Rest assured that a national tariff-payer advocate (if we had one) would be inundated with projects.
Consider what transpired during the last week of April. Unconfirmed reports began appearing on the internet that Amazon — the Goliath of online retail shopping — was poised to unveil a new feature in how it displays prices. The following blurb, posted on Punchbowl News on April 29, tells the story:
“Amazon doesn’t want to shoulder the blame for the cost of President Donald Trump’s trade war. So the e-commerce giant will soon show how much Trump’s tariffs are adding to the price of each product, according to a person familiar with the plan. The shopping site will display how much of an item’s cost is derived from tariffs — right next to the product’s total listed price.”
A national tariff-payer advocate could have had a field day with this development.
De Minimis No Longer
The impetus for Amazon’s move was a policy change the Trump administration had announced a few weeks earlier. In a move that was overlooked amidst the “Liberation Day” hoopla, Trump eliminated the long-standing de minimis rule for international parcels with a declared value not exceeding $800.
Previously, these shipments were exempt from duties on the grounds of practicality. This subcategory of imports was regarded as being too insignificant (and too numerous) for customs officials to worry about. The conventional thinking had been that the meager revenue generated by imposing tariffs on these items wouldn’t justify the associated inspection and processing costs. In other words, the juice was not worth the squeeze — or so we thought.
It has been known for some time that the de minimis exemption had gradually developed into a prominent gap in tariff enforcement. It’s estimated that the quantity of diminutive shipments has increased sixfold over the last decade, now numbering more than a billion parcels per year. Because each package cannot be separately inspected, there’s no telling what they contain — perhaps contraband, perhaps fentanyl. Critics began referring to the de minimis exemption as the U.S. tariff loophole. Technically speaking, they were not wrong.
On April 2 the White House changed all of that. It announced that, going forward (effective May 2), de minimis items sent through the international postal network would be subject to a duty equal to the lesser of a 30 percent tariff on the declared value or $25 per item.
The move will especially affect small-scale vendors that conclude sales to U.S. consumers through popular online platforms like eBay and Etsy. It will also affect online vendors that reach U.S. consumers through foreign-based platforms such as Shein or Temu — the massive e-commerce marketplace operated by the Chinese company PPD Holdings.
Amazon likewise found itself needing to adapt to the removal of the de minimis exemption — thus, the proposed change in how the company would display prices on one of its affiliated platforms. But for the retailer’s display of the embedded tariff cost, users might be baffled by the unexpected spike in prices and falsely conclude that Amazon was simply gouging them.
By way of example, consider a hypothetical listing of an imported espresso machine normally priced at $100. With Trump’s rescission of the de minimis exemption, the listing might read as follows: “Price: $125 — excluding local sales tax, including $25 tariff.”
That kind of disclosure seems harmless enough. As long as the pricing data is honest and accurate, who could possibly have a nonfrivolous complaint?
Amazon is no better off than if it had omitted the price disclosure. It’s merely passing along a tax cost, which companies do all the time. More importantly, the retailer is taking the beneficial step of informing consumers what it’s doing.
In this manner, U.S. consumers would be better educated about the tax-induced costs they’re facing. They would know the listed price is tax-inclusive as to tariff and tax-exclusive as to local sales tax — the precise amount of which would vary according to the purchaser’s location, as determined by the provided mailing address.
Given that our fictional purchaser would be asked to bear both tax burdens, I hardly see what’s objectionable about spelling it out. The more detail, the better.
I ask the readers of Tax Notes International, is transparency not optimal policy? Why would anyone prefer that U.S. consumers be kept in the dark? What strange virtue lies in keeping a federal tax burden concealed from public scrutiny? None that I can think of.
Hostile and Political
Readers know what happened next. White House press secretary Karoline Leavitt, flanked by the Treasury Secretary Scott Bessent, lashed out against Amazon during a morning briefing with reporters. She labeled Amazon’s move a “hostile and political act.” She went further, accusing Amazon of inappropriate bias, noting that the company proposed no similar pricing disclosure to reflect the rise of inflation that occurred during the Biden administration.
Her remarks were astonishing in how they framed Amazon as the bad actor, when all the company had done was to consider making tariff cost visible to the public. Moreover, Leavitt conveniently ignored that inflation (a dilution of household purchasing power) is not a distinct tax assessed and collected by the federal government, unlike a tariff. The bottom line is that recent inflation numbers (while highly embarrassing to Biden) cannot be compared apples-to-apples with Trump’s tariffs.
Leavitt’s complaint would have made more sense if she had instead focused on Biden’s own tariffs. That would have presented a like-for-like scenario. So, why didn’t Amazon come up with the bright idea of displaying per-item tariff costs a few years ago, while Biden was in office? The answer, as discussed above, is that Biden isn’t the one who eliminated the de minimis rule, which initiated the disclosure controversy.
Of course, Amazon’s senior management might have done us the favor of presenting per-item tariff costs irrespective of the status of the de minimis exemption. Ideally, that would have been done long ago, for the sake of transparency and enlightening retail consumers. Had that occurred, it would scarcely matter who happened to be in the White House. Both Trump and Biden imposed heavy tariffs that translated to higher consumer prices.
Objectively, what Leavitt describes as a “hostile” act by Amazon is nothing more than economic transparency. The alternative is that the federal tax burden be intentionally obscured from public sight. What are we to make of that?
It’s troubling that anyone in government — at any level of government — would actively seek to keep a tax concealed from U.S. consumers. Rather than scold Amazon, the White House should have praised the company’s pricing scheme as a step forward in commercial stewardship.
Leavitt and her boss should have hailed the move as an advancement in “America First” economic policy. After all, but for such disclosures at the retail level, consumers might not realize they’re poised to purchase a product made on foreign soil. One might liken the disclosures to a tool of economic patriotism.
When you think about it, the proposed disclosures would likely encourage the consumption of domestically produced goods. The feared chilling effect on consumption, if any, would be limited to imports. Isn’t that how protectionism is supposed to work?
The right call here would have been an approach that embraces transparency: Allow Amazon to implement its price disclosures, then encourage all other retailers to follow suit. Give U.S. consumers as much price information as possible, and let them exercise discretion in the marketplace as they see fit. Instead, the administration revealed itself as overly fixated on dictating which tidbits of pricing data are visible and which are deemed so politically sensitive they must be concealed.
Pardon my frankness, but that’s weak. There’s no way around it. Tariffs affect retail prices and everybody knows it. The White House needs to own it.
Hello Jeff, This Is Donald
Back to our timeline. Within a few hours of Leavitt’s remarks, Trump phoned Amazon CEO Jeff Bezos. The purpose of the call was to urge Bezos to reverse course on the price disclosure. Bezos accommodated the request. Tim Doyle, a spokesperson for Amazon, later explained the situation as follows:
The team that runs our ultra-low-cost Amazon Haul store considered the idea of listing import charges on certain products. This was never approved and is not going to happen.
There you have it: a dust-up over nothing. Amazon’s senior management never even approved the disclosure policy, supposedly. Trump later commented that “Jeff Bezos was very nice . . . he solved the problem very quickly.” Again, the only “problem” was that somebody wanted to keep people ignorant about tariff costs being passed to retail consumers.
Trump and Bezos have a peculiar relationship. By way of reminder, Bezos is the second wealthiest man in the world (behind Elon Musk and ahead of Mark Zuckerberg), with an estimated net worth of $220 billion. Trump frequently criticized Bezos during his first term, accusing Amazon’s business model of undercutting competitors on price and thereby harming traditional brick-and-mortar establishments.
This friction did not last. Last year, with the presidential election fast approaching, Bezos seems to have made goodwill gestures toward Trump. Perhaps coincidentally (or not), The Washington Post, which Bezos owns, refrained from endorsing a presidential candidate. While superficially neutral, the policy shift was tantamount to a win for Trump. Unlike Musk, Bezos did not contribute to Trump’s campaign ahead of the election, but he did donate a cool $1 million to Trump’s inauguration fund. Bezos dined with Trump at Mar-a-Lago in December 2024 and was in the Capitol rotunda when Trump was inaugurated on January 20. Whatever their prior differences might have been, the two are now getting along quite well.
I mention this because it relates to my earlier point about the role of an independent voice within the federal government — my proposal for a national tariff-payer advocate. The above episode confirms that retailers cannot be counted on to voluntarily display pricing data that fleshes out per-unit tariff costs. That means the job of educating the public on these matters must fall to someone else — why not a dedicated public servant? This is also why such an advocate must be formally recognized, by statute, as an independent actor.
Hurts So Good
It’s at this point that I turn to an unlikely source of inspiration: the late congressman Phil Crane, a Republican who spent 36 years in the House of Representatives. To paraphrase Crane, the “worst tax imaginable” is a hidden tax.
Hidden taxes are sinister things, Crane told me on more than one occasion. His concern was that because people don’t realize they’re paying a tax, they don’t know enough to protest loudly against it. That conforms to Crane’s ideological stance that all taxes must hurt a little bit, and to that end they must first be visible to the taxpayer.
Crane offered these comments in the context of a conversation about VAT, to which he was vigorously opposed. I quibbled with his characterization of VAT as a hidden tax. Sure, VAT is price-inclusive (unlike the retail sales taxes used by most U.S. states), but
I’d point out that VAT charges are typically listed on a consumer’s receipt.
Crane had a ready response for that, noting that few people these days bother to study their receipts. Besides, the appropriate time to inform consumers of the tax burden they’re facing is not after the purchase has been completed, but before it takes place — when the acquired knowledge is able to influence their purchasing decision. Touché, congressman!
Crane’s criticism wasn’t limited to VAT; he detested all forms of tax-inclusive pricing. He once told me that even the federal gasoline excise tax wasn’t as transparent as it could be, and that upset him. Despite that, the excise tax is sensitive enough that neither Republican nor Democratic lawmakers have dared to increase it since 1992.
Crane was a deeply conservative lawmaker, one whose positions I often disagreed with. But he had a valid point about transparency. I wonder what he would have thought about Amazon’s augmented pricing policy, which would have spelled out the embedded tariff cost.
More to the point, I wonder how U.S. consumers would have reacted to Amazon’s pricing scheme, had it been allowed to play out without intervention from the executive branch. It’s pure speculation on my part, but I’d guess that most consumers would greatly value the additional pricing details.
Indeed, there’s emerging evidence they do. Increasing numbers of U.S. consumers are logging on to their Temu accounts and taking screenshots of product listings, then circulating the images over social media. It’s an impromptu response to such information not being made available by U.S.-based retailers like Amazon. Think of it as tax transparency via crowdsourcing.
Temu, as it turns out, has chosen to be transparent about embedded U.S. tariff costs — a direct consequence of Trump’s termination of the de minimis exemption. Temu has adopted the identical disclosure practice that Amazon considered before backing down under pressure from the White House. As a result, with a little digging, U.S. consumers should be able to easily discover embedded tax costs resulting from the imposition of U.S. tariffs. It’s pathetic, however, that we need to resort to the sharing of screenshots from a Chinese website to be fully informed.
Knowledge is power, as they say.
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