A group of US House Democrats has called for the “de minimis” business gap to be closed so that Chinese e-commerce companies Shein, Temu, and others can enter US businesses without paying import tariffs.  ,
126 House Democrats on Wednesday signed a letter from US Representatives Rosa DeLauro, Earl Blumenauer, and Tom Suozzi, asking US President Joe Biden to use senior power to close the de minimis hole and safeguard Americans from its alleged growing problems.  ,
” It is impossible to overstate the necessity of closing the de minimis gap. The group wrote in the text that” Americans continue to die from misrepresented fentanyl-laced medications that are ordered online, trousers assessment thanks to de minimis, and are delivered to Americans ‘ doorsteps.”  ,
” De minimis imports, especially from China, even escape most active business enforcement mechanisms, including the Uyghur Forced Labor Prevention Act and Section 301 tariffs used to keep trade cheats accountable”, they said.
Additionally, according to them, 18 US cotton plants have shut down over the past few months as a result of the de minimis loophole’s flood of imports from China, leaving hundreds of Americans without jobs.
The US Consumer Product Safety Commission, an independent branch of the US government, requested on September 4 that its employees check Shein and Temu to see if their outside manufacturers had performed as required by the Consumer Product Safety Act.  ,
The two directors said they are conscious of reports in the media that “deadly infant and toddler products” are readily available on Shein and Temu. They also reported that” thousands of Chinese companies and distributors have joined the supply chain for Shein and Temu” to sell Chinese products ranging from T-shirts and clutches to electrical and kitchen products.  ,
US businesses are envious, claim they.
Shippings with valuations under US$ 800 are exempt from US customs assessment and taxes under the de minimis price concept, also known as Area 321 of the Tax Act of 1930.  ,
The original$ 200 cap was changed to$ 800 in February 2016 after being increased by then-US president Barack Obama. The improve was intended to support regional e-commerce companies like Amazon.  ,
Shein and Temu have since expanded their companies in the US thanks to the revised law, especially given that some Chinese goods received an additional 25 % tax in 2018.
Last month, Shein was the most downloaded application in the US industry’s fashion and beauty game segment, registering more than 35 million files.
Following it, Poshmark and Nike had about 10 million files, and Nike had 15.2 million. Even in 2023, Temu was the most downloaded iPhone apps in the US with 103 million files, according to Appfigures.  ,
Shein and Temu are building civilizations around the de minimis gap in US trade regulations, according to a report from the US House Select Committee on the Chinese Communist Party from June 2023, which has raised attention of their businesses.
In an article published on Thursday, US politicians called for closing the “hole” of the de minimis law because British e-commerce firms are envious of the rapid expansion of their Chinese competitors in the US, according to Lai Jiaqi, a poet at Guancha.cn. However, many analysts believe that the US government might not want to alter the concept right away because it will only increase prices.
Cui Lili, a professor at the Shanghai University of Finance and Economics, claimed that the US’s de minimis law may actually help Taiwanese companies by promoting them up the value-added rope.  ,
” China’s cross-border e-commerce platforms that offer products at very low prices will be hurt if the US tightens its$ 800 de minimis rule”, Cui said. ” In the future, they will have to change their strategy from selling low-price items to high-quality ones. Some Chinese consumer brands may gain new opportunities as a result.
AB Bernstein, a New York-based research and brokerage firm, said the combined market share of Shein, Temu and TikTok Shop in the US will grow to about 5 % by the end of this year from 3 % a year ago.
According to Statista.com, Amazon still had a market share of 37.6 % in the US last year, followed by Walmart ( 6.4 % ), Apple ( 3.6 % ), and eBay ( 3 % ). The growth of Chinese e-commerce platforms has sucked up American players ‘ market shares.
Legislations
According to Chinese Customs, China’s e-commerce exports , grew , 19.6 % year-on-year to 1.83 trillion yuan ( US$ 257 billion ) in 2023. However, the region’s total export increased simply 0.6 % to 23.77 trillion yuan for the same time.
In the first eight weeks of this year, China’s full exports rose 6 % compared to the previous year. E-commerce might have contributed to the expansion, but a detailed break has not been made.  ,
Republican Representative Gregory Murphy introduced the End China’s De Minimis Abuse Act policy in April of this year to stop China from dodging tariffs on Chinese products. He claimed that the proposed policy is essential for assisting smaller companies in the US.  ,
Instead of just forfeiting the shipment, this Act proposed to impose a new civil penalty of$ 5, 000 for the first offense and$ 10, 000 for each subsequent offense for any person who violates US de minimis law.
According to Murphy, citing the most recent Customs and Border Protection ( CBP ) data, about 60.8 % of de minimis entry to the US came from China.  ,
The National Council of Textile Organizations (NCTO ) also called for an “extremely flawed tariff waiver mechanism” to undergo a radical reform in April of this year. It said no finding a” extensive solution” would risk China’s continuing exploitation of American business.
A group of bipartisan senators on August 8 passed legislation to tighten the de minimis rule by fighting illegal goods, supporting trustworthy importers, and bringing in net profits ( FIGHTING ) for America Act.  ,
Senator Sherrod Brown claimed that nations like China are tampering with US business laws by using the de minimis gap and flooding America with deals filled with fentanyl and other illegal substances.
However, a commentary published by the state-run China Daily in April said the culture of US officials is: “if we don’t engage with them, prohibit them”. It said curbing Temu and Shein did hurt Sino-US connections.  ,  ,
Read: Shein, Temu bans second front in US decoupling generate
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