WASHINGTON (AP) — The Biden administration is taking a tougher stance on cheap products sold from China by companies like Temu and Shein, saying companies will no longer be exempt from tariffs if they ship goods they claim are worth less than $800.
President Joe Biden would no longer exempt these “de minimis” imports from tariffs under a proposed rule released Friday to tax all imports if they fall under Section 201 or 301 of the Trade Act of 1974, or Section 232 of the Trade Expansion Act of 1962.
Importers, mainly from China, have used the de minimis exemption for shipments of $800 or less to flood the U.S. market, with the number of such shipments increasing from 140 million a year to more than 1 billion a year, according to a White House statement.
The move comes at a delicate time for the world’s two largest economies. The United States has sought to reduce its reliance on Chinese products, shield emerging industries such as electric vehicles from Chinese competition and limit China’s access to cutting-edge computer chips. China, for its part, has seen manufacturing and exports as key to boosting economic growth as it grappled with deflation following pandemic-related lockdowns.
The existing exemption makes it harder for the U.S. government to block the import of banned fentanyl and synthetic drugs. The government also highlighted that Chinese e-commerce sites have abused the exemption to sell cheap clothing and textiles to U.S. consumers, potentially harming domestic workers and businesses.
The loss of the exemption could be a blow to Chinese companies like Temu and Shein that compete by keeping prices low and may now face additional scrutiny. The government said its Section 301 tariffs currently cover about 40% of U.S. imports, including 70% of textile and apparel imports from China.
The proposed regulatory changes also include new standards for de minimis shipments, such as a 10-digit tariff classification number and information about the person requesting the exemption.
