The Biden administration is tightening regulations on inexpensive Chinese products from companies like Temu and Shein by removing their tariff exemptions for items valued under $800. The proposed rule unveiled on Friday stipulates that all imports under Sections 201 or 301 of the Trade Act of 1974, or Section 232 of the Trade Expansion Act of 1962, will be subjected to tariffs. The White House says the number of shipments made under the de minimis provision has skyrocketed from 140 million to over 1 billion annually.
The timing of this move is critical as the US and China navigate economic tensions. The US seeks to reduce dependency on Chinese goods, bolster emerging sectors like electric vehicles, and limit China's access to advanced tech such as computer chips. China, meanwhile, relies on manufacturing and exports to spur economic recovery amidst challenges like deflation post-pandemic. The existing exemption has made it challenging for the US to prevent the import of banned substances like fentanyl and for Chinese e-commerce sites to undercut American businesses by selling low-cost textiles and apparel.
The potential loss of the exemption poses a significant threat to the business model of Chinese companies like Temu and Shein, which may now face increased tariffs. The government noted that Section 301 tariffs already apply to 40% of US imports, covering 70% of textile and apparel imports from China. The proposed changes will also enforce new criteria for de minimis shipments, such as mandatory 10-digit tariff classification numbers and detailed information on the claiming party. (This story was generated by Newser's AI chatbot. Source: the AP)
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