White House Proposes Rules Targeting Duty-Free Shipments by eCommerce Firms

The Biden administration said Friday (Sept. 13) that it plans to change trade rules that it said have been abused by China-founded eCommerce platforms.

The administration’s proposed rules changes target the de minimis exception that allows imported products to enter the United States without duties or taxes if the shipment’s aggregate fair retail is $800 or less, the White House said in a Friday (Sept. 13) fact sheet.

The number of shipments claiming this exception has risen from 140 million a year to over 1 billion a year over the last decade, with most of these shipments coming from several China-founded eCommerce platforms, the fact sheet said.

The White House said that the increase in shipments claiming the de minimis exception has made it more difficult to enforce trade laws, health and safety requirements, intellectual property rights and consumer protection rules; has made it challenging to prevent illegal products from entering the country; and has undercut American workers and businesses.

U.S. Secretary of Commerce Gina M. Raimondo said in a statement released Friday that Chinese eCommerce platforms have skirted tariffs by abusing the de minimis exception, harming American workers and businesses who have been denied a level playing field.

“With these new actions, the Biden-Harris Administration is standing up for American consumers and cracking down on Chinese companies’ efforts to undercut American workers and businesses,” Raimondo said in the statement.

The White House said in the fact sheet that it proposed rules that, among other things, would exclude from the de minimis exception about 40% of all U.S. imports, including 70% of textile and apparel imports from China. It also called on Congress to pass a more comprehensive reform of the de minimis exception.

Companies that ship direct to U.S. consumers from China, such as Shein and Temu, have benefited from the de minimis exception, Reuters reported Friday. After the White House announcement, Temu owner PDD Holdings’ shares dipped 5%, per the report.

It was reported in June that Amazon plans to add a section to its shopping site that aims to compete with Temu and Shein by offering items that are cheap and are shipped from China to overseas customers.

The report said it was not clear if the items offered on the marketplace will be shipped in a way that exempts them from U.S. customs duties, as both Temu and Shein do.