The US government said on Friday it will work to curb the “overuse and abuse” of a mechanism that allows lower-value imports to enter the country duty-free, as concerns grow about Chinese shipments.
Under a new regulatory effort, U.S. officials will seek to exclude certain products from this trade exemption — a move that could affect Chinese textile and apparel imports.
While about 140 million annual shipments entered the United States under the de minimis exemption a decade ago, that grew to over a billion last year.
A key factor behind the rise is the growth of Chinese-founded online retailers Shein and Temu, according to US officials. Both platforms are known for selling items at low prices.
“American workers and businesses can overcome competition on a level playing field, but for too long, Chinese e-commerce platforms have circumvented tariffs by abusing the de minimis exemption,” Commerce Secretary Gina Raimondo said in a statement.
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“Foreign companies, e-commerce platforms established mainly in China, are flooding the US market with low-value products,” National Economic Council deputy director Navtej Dhillon told reporters.
“This exponential increase in de minimis shipments makes it more difficult to enforce our laws,” he added.
With the exemption in place, such foreign shipments enter the country with fewer loopholes, potentially allowing unsafe products and illegal substances to avoid screening as they enter the United States, Dhillon said.
To avoid this, President Joe Biden’s administration will seek to exclude certain products from the exemption.
That includes goods facing Section 301 tariffs — a key tool used to justify levies against China in recent years.
The Section 301 tariffs hit about 70 percent of Chinese textile and apparel imports, meaning the move will drastically reduce the number of shipments entering through the de minimis exemption, said Daleep Singh, deputy national security adviser for international finances.
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Also targeted are packages containing products subject to Section 232 tariffs on steel and aluminum products, as well as Section 201 safeguards affecting solar power generation.
Officials said the stricter rules do not apply to imports from a single country.
On Wednesday, a group of more than 120 US lawmakers expressed “serious concerns” about the de minimis “trade loophole” in a letter and called on Biden to close it.
They said such imports threatened American manufacturers and accused them of “putting American consumers at great risk by flooding the market with counterfeit and sometimes dangerous imported products, including fentanyl and precursor chemicals from China.”
U.S. officials will also try to establish rules for those who continue to use the de minimis exemption, such as new information collection requirements.
“The administration is calling on Congress to pass legislation this year to comprehensively reform the de minimis exemption,” Singh said.
Source: AFP