Biden Administration Takes on Shein and Temu

(Source)

The Biden administration is stepping up efforts to clamp down on cheap imports from China, targeting e-commerce platforms like Shein and Temu that have used the “de minimis” rule to avoid tariffs on low-value shipments. The new regulatory action proposes ending those tariff exemptions, particularly for products under $800, in an effort to level the playing field for American companies.

• Driving the News: The proposed legislation aims to close the “de minimis” exemption that 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 1974 Trade Act on Chinese goods, will now be subject to scrutiny, and the government is pushing for more detailed information about shipments to help Customs and Border Protection better identify illegal or dangerous imports, such as chemicals used to make fentanyl. House Democrats stressed the urgency of the move, saying: “Americans continue to die from misbranded fentanyl-laced pills that are ordered online, bypassed screening under the de minimis, and delivered to Americans’ doorsteps.”

• Why is this important: Shein and Temu have expanded rapidly in the US by exploiting a supposed legal loophole to ship products directly to consumers, avoiding import tariffs. This has led to significant increases in market share, with Shein leading in fashion app downloads and Temu taking the top spot for iPhone downloads in 2023. The flood of these cheap shipping services has hurt US businesses and workers, leading to the closure of 18 textile mills. Responding to the changes, Shein reiterated its support for the reform, calling for a “level, transparent playing field”. Temu, on the other hand, said it was reviewing the proposals but remained “committed to delivering value to consumers”.

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