WASHINGTON (AFP) – The United States (US) government said yesterday it will work to curb the “overuse and abuse” of a mechanism allowing lower-value imports to enter the country duty-free.
Under a new regulatory effort, US officials will be seeking to disqualify certain products from this trade exemption – a move that could impact a majority of Chinese textile and apparel imports.
While roughly 140 million annual shipments entered the US under the de minimis exemption a decade ago, this has surged to over a billion last year.
A key factor behind the rise in volume 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.
“Foreign companies, predominantly e-commerce platforms, 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 challenging to enforce our laws,” he added.
As the exemption stands, such foreign shipments enter the country with fewer oversights, potentially allowing unsafe products and illicit substances to avoid scrutiny as they enter the US, Dhillon said.
To prevent this, President Joe Biden’s administration will seek to disqualify certain products from the exemption.
This includes goods facing Section 301 tariffs.
Section 301 tariffs hit approximately 70 per cent of Chinese textile and apparel imports, meaning the move would drastically reduce the number of shipments entering through the de minimis exemption, said Deputy national security advisor for international economics Daleep Singh.
But officials added that the tighter rules would not only apply to imports from a single country.
On Wednesday, a group of over 120 US lawmakers raised “grave concerns” over the de minimis “trade loophole” in a letter and urged Biden to close it. They said such imports threatened US manufacturers and charged that these “expose American consumers to great risk by flooding the market with fake and sometimes dangerous imported goods”.
US officials will also look to introduce rules for those who continue using 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,” said Singh.
