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The Biden administration is working on enforcing a new set of rules that will make it harder for Chinese-linked e-commerce retailers Shein and Temu to import goods to the US.
The White House on Friday said it’s using executive authority to take action against “increased abuse of the de minimis exemption, in particular China-founded e-commerce platforms, and strengthening efforts to target and block shipments that violate US laws.”
The de minimis trade provision permits shipments costing no more than $800 to enter the US duty-free and with minimal paperwork and verification.
The Biden administration is also proposing stringent rules on the entry of low-value shipments, including the addition of a 10-digit tariff classification number to “improve targeting of de minimis shipments and facilitate expedited clearance of lawful de minimis shipments.”
Shein and Temu’s US operations allow Chinese suppliers to sell to shoppers and ship directly to them without having to stock goods in US warehouses.
Temu, owned by Chinese e-commerce major PDD Holdings, launched in the US in September 2022, while Shein has been selling to US consumers since 2017.
According to an August eMarketer study, nearly half (44%) of Gen Z users surveyed make at least one purchase on Shein monthly, “making it the most popular Chinese marketplace among the demographic, although Temu isn’t far behind at 41%.”
Shipping giant Flexport’s CEO Ryan Petersen said he has had a few conversations with customers who are eager to understand “if this bill is going to hit or, in this case, an executive order, is it going to happen before or after Black Friday.”
Petersen said the new order, if signed, may also impact a host of US e-commerce companies.
“One thing that goes overlooked here is that the conversation is usually about China e-commerce providers, and that’s what’s in the White House press release,” he added. “But at least 30 of the top 100 brands that sell on Shopify do fulfillment out of Mexico, out of Tijuana, in order to take advantage of de minimis.”