White House targets Chinese retailers with planned trade fix

Bloomberg - The Biden administration is moving to narrow a trade loophole that Chinese online retailers like Shein and Temu have used to ship a torrent of packages containing cheap goods into the US every day.

White House officials on Friday (Sep 13) announced they intend to propose rules that would rein in use of the so-called de minimis exemption allowing products worth less than US$800 to go directly to consumers without customs declarations or duties. The measures are aimed at reducing the evasion of US tariffs on Chinese goods and preventing fentanyl-laced shipments from entering the country.

They would remove de minimis eligibility from products subject to trade enforcement actions under Section 301 and Section 201 of the US Trade Act, and Section 232 of the Trade Expansion Act. Since about 70 per cent of Chinese textile and apparel imports are subject to Section 301 tariffs, the move would kneecap shipments entering through de minimis.

The administration is also pursuing rulemaking for new information collection requirements and “implementing new steps” to ensure that products meet consumer safety standards, said Daleep Singh, deputy national security adviser for international economics.

US shares of Temu-owner PDD fell 2.92 per cent on Friday to US$94.49 as at 2.45 pm in New York. PDD is down 36 per cent this year, owing to economic malaise in China highlighted by a gloomy outlook issued by the e-commerce company last month.

Shipments under the de minimis standard have surged to one billion packages last year, up from 140 million a decade ago. That’s overwhelmed US agencies responsible for screening packages for unsafe or illicit goods, US officials said, as they unveiled the measures intended to strengthen protections for American consumers and workers.