Washington, September 14 – The U.S. government announced on Friday that it will take steps to limit the duty exemption for packages valued under $800 (721.96 euros), a policy known as “de minimis,” which is widely utilized by Chinese e-commerce giants such as Shein and Temu. This decision comes as part of President Joe Biden’s administration’s efforts to tighten customs controls and prevent the influx of illicit and dangerous goods, including fentanyl precursors.
New Proposed Rule to End De Minimis Exemption
The administration’s new proposal aims to revoke the de minimis exemption for low-value goods and require greater transparency in the shipping process. It would mandate the disclosure of information about package contents to aid customs in identifying illegal or hazardous products. The move follows pressure from Democratic lawmakers, who urged Biden to close what they called a “loophole” that allows narcotics to enter the U.S. without paying duties.
| Current De Minimis Exemption | Proposed Change |
|---|---|
| Packages under $800 exempt from duties | Revoke exemption for certain shipments |
Historical Context and Regulatory Concerns
The de minimis exemption has been part of U.S. trade law since 1930, originally intended to accommodate individual travelers. In 2015, the exemption limit was raised from $200 to $800, allowing packages addressed to individuals to enter the U.S. duty-free with minimal customs scrutiny. However, the rapid increase in de minimis shipments, particularly from Chinese importers, has raised concerns over the ability of customs officials to adequately monitor these packages.
Increasing Strain on Customs
Daleep Singh, Deputy National Security Advisor, said that the “drastic rise in de minimis shipments” has made it difficult for customs to target and block illegal or dangerous packages. The new regulations aim to reduce the volume of such shipments to a manageable level, ensuring better screening. Another proposed rule would require product codes and additional information to be included with de minimis packages to help identify harmful contents.
| Year | De Minimis Shipments (Annually) |
|---|---|
| 2013 | 140 million |
| 2023 | Over 1 billion |
Impact on Chinese Retailers
The removal of the de minimis exemption could pose a significant challenge for Chinese e-commerce platforms like Temu and Shein, which rely on low-cost products to remain competitive in the U.S. market. The loss of this exemption would subject their shipments to higher scrutiny and potentially increase costs, affecting their ability to offer low-priced goods.
Tariff Increases on Chinese Imports
The announcement coincided with the conclusion of public comments on new tariffs on Chinese imports, which include sharp increases on products such as electric vehicles, semiconductors, and lithium-ion batteries. These tariffs, part of an $18 billion package, include 100% duties on electric vehicles, 50% on semiconductors, and 25% on batteries, and are set to take effect on September 27.
Key Keywords:
de minimis exemption, U.S. customs duty, Shein and Temu, Chinese e-commerce imports, Joe Biden administration, fentanyl precursor shipments, new U.S. tariff increases, electric vehicle tariffs
