US targets Chinese retailers Shein and Temu with crackdown "empty" commercial

President Joe Biden’s administration said Friday it is taking steps to curb shipments below the $800 threshold entering the United States duty-free, which has been exploited by Chinese e-commerce companies such as Shein, Temu and PDD Holdings.

White House officials said they will propose a new rule to deny the exemption to packages containing low-value goods (called “de minimis”) subject to tariffs on Chinese products.

The proposed trade rule includes a requirement for new disclosures for small packages to help U.S. Customs and Border Protection officers better identify the contents of illicit or unsafe products, such as precursor chemicals that can be turned into the deadly opioid fentanyl.

“American workers and businesses can outperform anyone else on a level playing field, but for too long Chinese e-commerce platforms have evaded tariffs by abusing the ‘de minimis’ exemption,” said US Secretary of Commerce Gina Raimondo.

The announcement comes two days after Democratic lawmakers urged Biden to use executive powers to shut down the provision. “de minimis”calling it a “loophole” that allows Chinese imports to bypass tariffs and ship narcotics without customs inspection.

The exemption has been part of U.S. trade law since 1930 to allow entry of goods from travelers, but the threshold was raised from $200 to $800 in 2015 to help small businesses, including sellers on e-commerce platforms like eBay.

Packages under the limit enter duty-free and with less customs scrutiny as long as they are addressed to private residences.

The volume of packages below the $800 threshold has soared to more than 1 billion last year from about 140 million a decade ago, according to White House officials, who attribute most of the growth to Chinese e-commerce companies.

“A large portion of that volume comes from Shein and Temu, and we are very concerned that large foreign companies are using the loophole on such a scale and volume that we believe amounts to abuse,” a U.S. official said.

In response to the move, Shein reiterated comments made last year by its CEO Donald Tang calling for a “de minimis” reform “to create a level and transparent playing field, where rules are applied uniformly and equally.”

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