US Takes Aim at Shein and Temu: New Import Rule Proposal Targets E-Commerce

US Takes Aim at Shein and Temu: Implications of the New Import Rule Proposal

The Biden administration is addressing the “de minimis” exemption that it claims some Chinese e-commerce companies abuse to ship products under $800 to US customers without tariffs. New rules proposed on Friday subject certain shipments from China to closer inspection and tariffs—a move that will directly affect products sold by ultralow-cost retailers like Shein and Temu.

The Surge in Duty-Free Shipments

With the rise of Chinese e-commerce sites such as Shein and Temu, the US has witnessed a staggering increase in shipments claiming the duty-free exemption. These shipments have skyrocketed from 140 million per year to over 1 billion within a decade, with the majority of products utilizing this exemption originating from China. Shein and Temu leverage this exemption by dispatching individual products directly to customers rather than shipping in bulk.

Proposed Changes and Their Impact

• The US will prevent companies from claiming the de minimis exemption if their goods fall under Section 301, Section 232, and Section 201 tariffs.
• These sections apply to various products including those from China, as well as steel, aluminum, washing machines, and solar panels.
• The changes would subject these shipments to closer inspection by US Customs and Border Protection, in addition to applying tariffs.

Political Response and Consumer Safety

This week, House Democrats urged President Joe Biden to close the de minimis “loophole.” Safety regulators have also prompted the US Consumer Product Safety Commission to investigate concerns over Shein and Temu selling goods that may breach regulatory health and safety standards.

A Call for Fair Competition

“American workers and businesses can outcompete anyone on a level playing field, but for too long, Chinese e-commerce platforms have skirted tariffs by abusing the de minimis exemption,” stated US Secretary of Commerce Gina M. Raimondo. “With these new actions, the Biden-Harris Administration is standing up for American consumers and cracking down on Chinese companies’ efforts to undercut American workers and businesses.”