A bipartisan pair of senators are seeking to eliminate a long-standing customs valuation practice that allows some importers to lower their duty bills.

Members of the Senate Finance Committee — Bill Cassidy (R-La.) and Sheldon Whitehouse (D-R.I.) — have introduced the “Last Sale Valuation Act.” The bill would end the use of the “first sale” rule, instead requiring that duties be assessed on the price paid in the final sale that brings goods into the United States.

Under current practice, some importers rely on the price paid by a middleman to a foreign manufacturer — the “first sale” — as the basis for calculating duties. The proposed legislation would require customs value to be based on the last sale to the U.S. buyer, effectively eliminating that option.

Cassidy framed the issue as one of fairness, saying the U.S. should reward hard work rather than allow companies to exploit the system. Whitehouse described first sale as a loophole that gives multinational corporations an unfair advantage over small businesses and said closing it would support law enforcement efforts and level the playing field.

The debate over first sale is not new. Nearly 20 years ago, U.S. Customs and Border Protection attempted to end the practice through regulation, and Congress later directed the U.S. International Trade Commission to study its use. A 2009 ITC report found first sale was relatively limited at the time, used in about 2.4% of total U.S. imports by value, and by roughly 8.5% of importers.

Trade professionals argue the practice is not a loophole, but a lawful valuation method established by the U.S. Court of Appeals for the Federal Circuit in 1988. They contend that companies using first sale must meet strict documentation requirements to prove transactions are conducted at arm’s length, making them among the most compliant importers.

However, as tariffs have increased in recent years, interest in first sale has grown. Advisors report that companies — especially higher-volume importers — are increasingly exploring the strategy to legally reduce duty exposure. Some firms have realized significant savings, though experts note the approach is not viable in every case due to documentation burdens, supplier relationships, or slim margins.

Supporters of the bill, including former Trump trade advisor Peter Navarro and the National Council of Textile Organizations, argue that first sale undermines the effectiveness of tariffs intended to boost domestic manufacturing and protect U.S. industries.

Opponents counter that eliminating first sale would not necessarily prevent duty mitigation strategies and could simply shift how companies structure their import transactions.

With bipartisan sponsorship and backing from key industry groups, the Last Sale Valuation Act sets up a renewed debate in Congress over customs valuation rules and the broader role of tariffs in U.S. trade policy.

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