Chethma De Mel, Jadetimes Staff
C. J. De Mel is a Jadetimes news reporter covering Entertainment News
New regulations, proposed by the Biden administration, would impose taxes on the flood of low-value shipments from China as part of a broader pushback against the deluge of packages coming from popular online retailers such as Shein and Temu. The plan targets so-called "de minimis" exemption that lets goods come in duty-free, tariff-free, and free of other charges when their value is below $800 £600 without collection by Customs. The administration argues the rule has been exploited by firms that mail directly from a manufacturer to a consumer, hence undercutting US competitors.
The exemption was increased from $200 to $800 in 2016 to promote trade and allow authorities to focus on more substantial shipments. However, lawmakers have griped it is being exploited, particularly by firms like Shein and Temu that have flooded into the US market of late. The changes would remove an exemption for Chinese goods that at the moment bear US tariffs, including shoes, machinery, and 70% of textiles and apparel. Rules also would call for shippers to provide more information to authorities.
Temu said its business model is about efficiency, not gaming the de minimis rule. The company added that it "is reviewing the proposed rules but remains committed to offering value to consumers." SHEIN also issued a similar statement, saying "its growth is due to its on-demand model" and that it supports a fairer application of the de minimis exemption. The company said it is also partnering with US Customs and Border Protection to bring more transparency to its shipments.
Aggressive marketing and ultra-low prices have propelled Shein and Temu into a competitive struggle with US retail giants such as Amazon. In turn, the most recent wave of low-value imports is attracting US politicians' attention over concerns around product safety and likely use of forced labor in Temu's supply chain. That triggered a balloon of packages entering the US under the de minimis exemption from 140 million in 2013 to over a billion in 2022, putting pressure on customs authorities.
The Biden administration responded by accusing Chinese e-commerce platforms of gaming the de minimis exemption to avoid consumer protection laws and tariffs. "American business can and will compete on a fair field, but the playing field is most certainly not level, and Chinese firms have dodged our rules for far too long," said Commerce Secretary Gina Raimondo.
The conservative policy group American Action Forum estimates the full removal of the $800 exemption could cost consumers between $8 billion and $30 billion annually. The rule will undergo a public comment period prior to its finalization. The European Union reportedly weighs similar measures in tackling the low-value imports from China. PDD Holdings, the parent company of Temu, sank over 2% following the announcement of the US government.
