The Biden administration is intensifying efforts to curb cheap imports from China, targeting e-commerce platforms like Shein and Temu that have taken advantage of the “de minimis” rule to bypass tariffs on low-value shipments. New regulatory actions propose ending these tariff exemptions, particularly for products under $800, in a bid to level the playing field for U.S. businesses.
- Driving the news: The proposed regulations aim to close the “de minimis” exemption, which has allowed Chinese e-commerce giants to flood the U.S. market with cheap goods. Products covered by existing tariffs, such as those under Section 301 of the Trade Act of 1974 for Chinese goods, will now face scrutiny, with the government pushing for more detailed shipment information to help Customs and Border Protection better identify illicit or unsafe imports like chemicals used to make fentanyl. House Democrats emphasized the urgency of the move, saying, “Americans continue to die from mislabeled fentanyl-laced pills that are ordered online, skirt inspection thanks to de minimis, and are delivered to Americans’ doorsteps.”
- Why this matters: Shein and Temu have rapidly expanded in the U.S. using the purported loophole to ship products directly to consumers, avoiding import duties. This has led to significant market share gains, with Shein leading fashion app downloads and Temu topping iPhone downloads in 2023. The flood of these cheap shipments has hurt American businesses and workers, contributing to the closure of 18 textile plants. Reacting to the changes, Shein reaffirmed its support for reform, calling for “a level, transparent playing field.” Temu, on the other hand, said it is reviewing the proposals but remains “committed to delivering value to consumers.”
