President Trump's decision to eliminate the de minimis duty-free exception for imports from China has significant implications for e-commerce, consumer goods, and the balance of trade. The change, aimed at curbing the influx of low-value shipments, is expected to impact major online retailers like Shein and Temu, who have heavily relied on the exemption. The move has sparked debate about the benefits and drawbacks of the de minimis system, with proponents arguing it fosters economic activity and consumer affordability, while critics contend it enables the importation of unsafe products and facilitates criminal activity.
President Trump has ended the de minimis duty-free exception for China, as part of his imposition of tariffs. The effects could be far-reaching: De minimis shipments account for most of the cargo entering the U.S., Customs and Border Protection. The agency said it was handling some 4 million de minimis shipments every day — a rate that would blow past the previous year's mark of more than 1 billion shipments.When asked to comment on the U.S.
shift, Teresa Murray of the Public Interest Research Group consumer watchdog told NPR that her group supports changes to the law. De minimis shipments'often don't have as much documentation, making it easier to get the shipments into the United States, whether we're talking about unsafe consumer products or fentanyl or food items that aren't permitted to be imported,' Murray said.. It became law in the U.S. Tariff Act of 1930, as a way to let people skip import fees for small-value shipments.. The U.S. level used to be $200, but it rose to $800 in 2016 — one of the highest in the world — when then-President Barack Obama signed the bipartisanItems imported under the exemption'are free of duty and taxes and are subject to expedited clearance processing,' the U.S. International Trade Commission notes. Backers of the existing de minimis structure say it eases commerce and gives consumers low prices; critics say it is used tolast fall to close the loophole. And U.S. agencies and politicians have said the law is prone to abuse, from unscrupulous retailers falsely labeling expensive items as costing under $800 to criminals shipping illegal drugs under the guise of innocuous goods. As Trump's new 10% tariff on Chinese goods took effect, the U.S. Postal Service said on Tuesday that it was suspending acceptance of packages sent from China and Hong Kong — but it, saying it's working with Customs and Border Protection on a way to collect the new tariff'to ensure the least disruption to package delivery.'Together, Temu and Shein accounted for about 17% of the U.S. discount market in 2023 for items such as consumer goods, fast fashion, and toys, according to a report on de minimis policies that Neither company responded to NPR's request for comment about the new U.S. de minimis policy before this story was published.'Restricting what qualifies for a de minimis exemption would help keep more unsafe toys and other products from getting into our homes,' Murray said.'This would make people in the United States safer.' But she also said that lowering the U.S. limit on de minimis wouldn't be enough to stop shipments of small packages that go directly from Temu and Shein to U.S. consumers without close inspection. Exporters also use'master cartons' (large containers holding individually wrapped boxes) and transshipments (transferring cargo to another container or vessel) to obscure products' origins and contents, While the new U.S. policy targets China, both Temu and Shein seem to be trying to become more global. They're among the Chinese-founded businesses that have shifted key parts of their corporate structures outside of China. The CRS report notes that Shein doesn't sell goods within China and has a parent company that'is based in Singapore and tied to a holding company in the British Virgin Islands,' while Temu's parent company, PDD Holdings¸'changed its legal domicile from the PRC to Ireland.
DE MINIMIS TARIFFS CHINA E-COMMERCE SHEIN TEMU US-CHINA RELATIONS IMPORTS CONSUMERS
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