The Biden administration has unveiled a proposal to impose new taxes on many low-value shipments from China, targeting e-commerce platforms like Shein and Temu. This move aims to address what the US government describes as abuse of a tariff exemption that previously allowed packages valued under $800 to enter the country duty-free.
The proposed changes seek to eliminate the de minimis exemption for Chinese goods currently subject to US tariffs. This would affect a wide range of products, including apparel, textiles, shoes, and machinery. Additionally, the new rules would require shippers to provide more detailed information to US authorities.
The de minimis threshold, raised from $200 to $800 in 2016, was initially designed to streamline trade and reduce the burden on customs officials by focusing on higher-priority shipments. However, the surge in low-value packages from Chinese e-commerce sites like Shein and Temu has drawn significant concern from lawmakers and regulators. They argue that these platforms exploit the exemption to offer lower prices, undercutting US competitors and straining border and customs resources.
Since their entry into the US market, Shein and Temu have gained popularity with aggressive marketing and ultra-low prices, putting pressure on established e-commerce players such as Amazon. Their rapid growth has also attracted scrutiny regarding product safety and allegations of forced labor.
Temu defended its business model, stating that its success is due to cutting out middlemen and passing savings directly to consumers. The company indicated it was reviewing the new rules but remained committed to offering value. Similarly, Shein emphasized its support for fair reform of the de minimis policy and reiterated its commitment to transparency and compliance with US Customs and Border Protection (CBP) requirements.
The Biden administration’s proposal reflects concerns over a dramatic increase in the volume of low-value shipments, which has soared from 140 million in 2013 to over 1 billion last year. Authorities argue that this surge complicates efforts to enforce consumer protection laws and block illegal shipments.
Commerce Secretary Gina Raimondo criticized the exploitation of the de minimis exemption by Chinese e-commerce platforms, asserting that American businesses can compete effectively on a level playing field. The proposed rules are expected to undergo a comment period before being finalized.
The American Action Forum, a policy group, warned that eliminating the $800 exemption could result in additional costs of $8 billion to $30 billion annually, which would likely be passed on to consumers.
The proposal comes amid similar considerations in the European Union, where authorities are exploring measures to address low-value shipments. Following the announcement, shares in PDD Holdings, the parent company of Temu, fell more than 2%.
